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WinnDixie 20150782MeetingTranscript

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  • 1. WINN-DIXIE STORES SHAREHOLDERS MEETING NOVEMBER 5, 2008 Corporate Representatives: • Peter Lynch Winn-Dixie Stores, Inc. President, CEO and Chairman of the Board • Larry Appel Winn-Dixie Stores, Inc. SVP, General Counsel, Secretary PRESENTATION Peter Lynch: Well good morning everybody and lets bring the meeting to order and if everybody would please take your seats. Good morning ladies and gentlemen, I'm Peter Lynch the President, Chief Executive Officer and Chairman of the Board for Winn-Dixie Stores, Inc. And I am pleased to welcome you to the Annual Meeting for Shareholders of Winn-Dixie Stores, Inc. Mr. Larry Appel, the Senior Vice President, General Counsel and Corporate Secretary will record the proceedings. I will review our most recent fiscal year and plans for the upcoming year in my President's Report later in the meeting. First I'd like to take this opportunity to introduce the members of our Board of Directors to all of you. Now I would ask that each Board member please stand as I introduce you. First, Gregory Josefowicz, the former Chief Executive Officer and Chairman of Borders Group, Inc. was our lead Director, Greg. Jeffrey C. Girard, former Vice Chairman, Finance and Administration of Shopko Stores, Inc. and Jeff is the Chair of our Audit Committee. Yvonne R. Jackson, President and the Principal of BeecherJackson and Yvonne is the Chair of our Compensation Committee. Terry Peets, Chairman of the Board of World Kitchen, LLC and Terry is the Chair of our Nominating and Corporate Governance Committee. Evelyn V. Follit, former Senior Vice President and Chief Information Officer of RadioShack, Charles P. Garcia, Senior Managing Director of Hispanic Capital Markets Group, James P. Olson, former Senior Vice President, Operations of PepsiCo International and Richard E. Rivera, President and Chief Executive Officer of Rubicon Enterprises, Inc. On behalf of our Company’s Board of Directors and management I would like to thank all of you for attending this meeting. This Company belongs to you, the shareholders. I'd like to take this opportunity to also thank the Board members for their support they have given the Company throughout this past year. Thank you. Also present today are George Kehl, Cindy Rose and Mandy Alvarez of KPMG, LLP, the Company's independent registered public accounting firm. If questions arise that KPMG should appropriately address they will be glad to respond. We are being assisted today by a representative of the American Stock Transfer and Trust Company, [Michael Robbie] who's been appointed as Inspector of Elections to this meeting to receive the proxies, judge the qualifications of voters, collect and count the votes and report, in writing, the results of the written ballots, if any, taken at this meeting and perform such other duties as may be required during the meeting. Also, I'd like to add that the Minutes of our last Annual Meeting and the List of Shareholders who are entitled to Notice of this meeting are also available. Any shareholder wishing to inspect the Minutes or Shareholders List during this meeting may do so by contacting the representative of the American Stock Transfer and Trust Company whom I've just introduced. Larry Appel, the Corporate Secretary of the Company will now report on the mailing of the Notice of this meeting in the presence of a quorum, Larry.
  • 2. Larry Appel: Thank you, Peter. I present to the meeting a copy of the Notice of Meeting dated September 22nd, 2008 and a copy of the Proxy Statement together with the affidavit of the Secretary, evidencing that American Stock Transfer and Trust Company, the Company's mailing agent and transfer agent on September 22nd, 2008 commenced mailing of copies of the Annual Report and Notice of Meeting and other documents to all shareholders of record of the company as of September 8, 2008 identified by American Stock Transfer and Trust Company. There are 54,285,456 shares of common stock entitled to vote. I hereby certify that as required by the Company's by-laws the holders of a sufficient number of shares of the stock, issued and outstanding and entitled to vote at this meeting are present in person or by proxy and that a quorum is present. Peter Lynch: Since an excess of a majority of the outstanding shares of the common stock of the Company is represented at this meeting in person or by proxy I declare a quorum is present and the meeting is now regularly and lawfully convened and ready to transact business. At this time I wish to determine whether there is anyone present who has not voted by proxy and desires to vote his or her shares in person. If so, please indicate by raising your hand, so that a ballot may be brought to you by the Inspector of Elections. Any hands? Got a hand in the very, very back. For those voting by ballot please mark your ballots as each item is covered. Your marked ballots will be collected after all the items have been addressed. Proposal Number One. The next order of business is the election of the individuals to the Board of Directors of the Company. Each Director is elected to serve for a term of one year until the next Annual Meeting of Shareholders or their successor is elected and shall qualify. At this meeting of shareholders, as reflected in the Proxy Statement, each of the nine current members of the Board, myself included, has been designated as the nominees for election. Additional information regarding each nominee is included in the Proxy Statement. I hereby declare the nine nominees to be duly nominated, the Company has not received written notice of any other nominations as provided in the Proxy Statement, therefore I declare the nominations closed. Is there any discussion on this proposal? If you are voting in person please take this opportunity to mark your ballot in regards to Proposal Number One. We will move to the next proposal and tabulate the votes after all proposals have been addressed. Proposal Two. The next order of business is the approval of the Winn-Dixie Stores, Inc. Employee Stock Purchase Plan. The Employee Stock Purchase Plan would provide associates of Winn-Dixie and its designated subsidiaries with an opportunity to purchase shares of our common stock through accumulated payroll deductions at a 5% discount of fair market value. If approved by the shareholders the Employee Etock Purchase Plan would be implemented as described in the plan document and included in the Proxy Statement as Appendix A. Additional information regarding the Employee Stock Purchase Plan is also included in the Proxy Statement. Is there any discussion regarding this proposal? If you are voting in person please take this opportunity to mark your ballot in regards to Proposal Number Two. We will move on to the next proposal and tabulate the votes after the proposals have been addressed. Proposal Three, the next order of business is the ratification of the selection and appointment, by the Board of Directors, of KPMG, LLP as the independent registered public accounting firm of the Company for fiscal year 2009 as set forth in our Proxy Statement. Is there any discussion regarding this proposal? For those shareholders who are voting in person I ask that you please finish marking your ballot. Inspectors of the Election please collect those ballots now.
  • 3. I would now like to take the time to make a few remarks while the votes are being tabulated. Its my pleasure to tell you that 2008 was a year of tremendous progress for our Company. We accomplished a great deal in every area of our operation. Our turnaround is tracking very well and our associates remain focused on our strategic vision and initiatives. During fiscal 2008 we improved annual sales, gross margins and adjusted EBITDA and generated positive operating cash flow. We're entering 2009 as a significantly stronger company positioned for greater success for the years ahead. I will begin with the highlights from the past fiscal year, which are discussed in detail in our Annual Report. In fiscal 2008 we generated net income of $12.8 million or $0.24 per share. We achieved gross margin of approximately 27.2% an increase of 30 basis points as compared to prior year. We increased identical store sales by approximately 90 basis points over fiscal 2007 and we improved the Company's liquidity position to $657 million, an increase of approximately $64 million from the end of fiscal 2007. We are particularly pleased to have done this while investing approximately $230 million in the future of our business. Our store remodel initiative is the centerpiece of our long term strategy. To date we have remodeled nearly 20% of our stores and are well on track to have 50% completed by the end of fiscal 2010. As our remodel initiative moves forward we will have an increasingly strong store base to leverage our strength of our brand. At the end of fiscal 2008 our offensive remodel stores had a weighted average sales lift of 11.5% for the first year of operation after the grand reopening phase. Our remodels continue to exceed our 10% annual sales growth target and we're also committed to improving the conditions of those stores not yet slated for remodel in the near term. The Company's performance during the year can be attributed to the talented management team we have assembled and the continued hard work of our dedicated associates. I am very proud of what we accomplished in fiscal 2008 and I am very confident that we have the right people and the strategic plan in place to maximize shareholder value. I'm also confident that our direction of being fresh and being local is the right one. Particularly in these challenging economic times we are seeing that more and more people are eating at home now rather than a restaurant. They're learning to cook again, the family meals are taking on a greater significance than they have in many years. As that trend continues, and it will, Winn-Dixie will be there for our customers to provide them with the quality and the value they expect and they deserve from their neighborhood grocer. In fact, our neighborhood merchandising and marketing initiatives were designed specifically to ensure that each of our stores meets the unique needs of the community it serves. In fiscal 2008 we opened the doors of remodel locations to showcase each of our five targeted formats, Hispanic, Urban, Affluent, Kosher and Resort. These neighborhoods specific strategies are being well received by our shoppers and we'll continue to use these in the five formats in more stores as we move forward. We're also very focused on earning the trust and the loyalty every day by helping our customers to maximize their shopping dollars by offering programs such as Good 'Til, 10 for $10, Buy One, Get One Free items. In addition, our corporate plans initiative remains a top priority for us. Private label products have increasingly become a favorite option among shoppers looking to trim their grocery budgets without having to sacrifice the quality of the products in their baskets. By the end of fiscal 2008 we had approximately 1,500 private label products with redesigned packaging on the shelf, which surpassed our original goal by 500 items. Also during fiscal 2008 our penetration rate for private label products improved by 20.6% in the categories that we measure -- an increase of 150 basis points from fiscal 2007.
  • 4. Our plan is to have a total of 3,000 private label products on the shelf with redesigned packaging by the end of fiscal 2010. Despite the economic climate, looking ahead, we see near term opportunities to improve profitability by focusing on growing profitable sales and keeping a very tight control on operating expenses. In the longer term we'll continue to produce sustainable sales growth through our strategic initiatives. In fact, just last week we reported our first quarter earnings for fiscal 2009 and results were very positive as you will note in the following highlights. Our adjusted EBITDA was $27 million or a 38.5% increase from a year ago. Our gross margin was 27.9% an increase of approximately 40 basis points compared to 27.5 in the year ago period. Our identical store sales increased by 3% and we're on track to remodel 75 stores in fiscal 2009. In our first store, remodels have exceed the 10% identical store sales lift. These results all point to the fact that we have a solid business plan and we are executing it very, very well. In closing I want to thank our more than 50,000 associates for their hard work and dedication, which is so critical to our continued success. As I've said so many times, its all about the people, and I believe we have some of the best people in the industry. I also want to thank our business partners and investors for their support and their loyalty. Now I'd like to take a few minutes to present a video that showcases the tremendous progress that we have made in fiscal 2008 and early fiscal 2009. If you would roll the video please. (VIDEO PLAYING) Peter Lynch: Well thank you and the good news is hurricane season is over, okay. We've got another six months before that thing gets wound up again and I know we'll be even better prepared next year than we were this year. Mr. Secretary, would you now please show us the results of the vote. Larry Appel: Mr. Chairman, the record of the meeting will reflect that at least 41,927,292 shares voted for the election of the nine nominees to the Board of Directors provided in our Proxy Statement for terms expiring at the 2009 Annual Meeting of Shareholders. On the Proposal for the approval of the employee stock purchase plan, 43,197,527 shares voted for, 2,670,317 against and 82,082 shares abstained from the voting. On the Proposal related to the ratification and approval of the appointment of KPMG, LLP as independent registered public accounting firm of the company for the fiscal year commencing June 26th, 2008, 50,075,578 shares voted for, 125,472 shares voted against and 28,496 abstained from the voting. I hereby declare that the nominees for the Directors have been duly elected. I further declare that the proposal to approve the employee stock purchase plan and the proposal to ratify the appointment of KPMG, LLP as the independent registered public accounting firm for the Company for fiscal 2009 has been duly adopted. Is there any further business to come before the meeting at this time? Are there any questions regarding the Company that can be answered at this time? Gentleman back here. QUESTIONS AND ANSWERS Unidentified Audience Member: (inaudible - microphone inaccessible) And some 40 years in the consumer products area. I have a question mainly the man for Mr. -- from Rubicon might answer this but for many years it was regarded that having black as a major color in your products was anathema to sales. And I notice Winn-Dixie's private label now is going heavily into black as part of their label. And I wondered if
  • 5. we -- have you done new research that indicates that there's a change in the consumers reaction to the black? Peter Lynch: Well, I'll take that one for you. We do a lot of heavy research into design of our packaging. In fact we have a third party that’s actually involved with the design for those type of label products. We also go ahead and take those products and bring them to the consumers before we go out and market them to them. So, far all we've seen is that the colors, the packaging has been received very, very well by our consumers. In fact I talked about this year over last year being up 150 points on our penetration. If you take the two years back to back we're up over 350 basis points of penetration which is beyond what typically happens in the industry. So, if you take between the research we did on the colors and what the consumers are showing us with their purchasing that these products have been designed very well and the consumers accepting that packaging very well. Okay? Are there any other questions, anyone else? There being no further business I wish to thank each of you for attending the Annual Shareholders Meeting as well as those who submitted their proxies but were unable to attend. Thank you for helping Winn-Dixie in getting better all the time. The meeting is now adjourned and I thank you for attending. Thank you very much.

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