Stores, Inc.
Annual Report

Earnings per diluted share $1.33
   Taxes per diluted s...

Winn-Dixie is one of the nation’s largest
retail food chains, with more than 139,...
HIGHLIGHTS                                                                                                                ...

L     ast year, our annual                                    one of the indicators we will con...

I    n 1998, more than two                                  can continue to operate our new Winn...

W               e took many                            mean that more customer needs can be met

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      1994   1995   1996   1997   1998

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FINANCIAL REVIEW                                                                           SETUP          CONTENT

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Liquidity and Capital Resources                                           was outstanding u...
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     Years Ended June 24, 1998 and June 25, 1997   ...
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                 ew York Stock
v                                       ...
MANAGEMENT                                                                                        SETUP               CONT...
SHAREHOLDER INFORMATION                                                                SETUP         CONTENT

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  1. 1. SETUP CONTENT Winn-Dixie Stores, Inc. 1998 Annual Report Earnings per diluted share $1.33 Taxes per diluted share $2.03 See page one
  2. 2. SETUP CONTENT BUSINESS DESCRIPTION Winn-Dixie is one of the nation’s largest retail food chains, with more than 139,000 associates, dedicated to providing our customers with the best quality, variety and service at competitive prices. As of June 24, 1998, the Company operated 1,168 supermarkets in 14 states and in the Bahama Islands. The Company also oper- ated a network of distribution facilities, processing and manufacturing plants and a fleet of trucks, providing a comprehensive support system. ABOUT THE COVER Depicted on our cover is a sample of some of the delicious food that today’s busy shoppers can find at their local Winn-Dixie Marketplace. We offer customers what- ever suits their plans — from carry-out dinners ready to serve or simply put in the oven or microwave, to the fresh foods and extra ingredients that go into preparing a delicious, home-cooked meal. TABLE OF CONTENTS CLICK ON TOPICS… Highlights ............................................... 1 Message to Our Shareholders............... 2 Isn’t Life Delicious ................................ 5 Financial Review.................................... 8 Winn-Dixie at a Glance ........................ 11 Management........................................... 12 Shareholder Information....................... 13 ZOOM OUT
  3. 3. HIGHLIGHTS SETUP CONTENT Percentage For the Fiscal Year June 24, 1998 June 25, 1997 Change June 26, 1996 June 28, 1995 June 29, 1994 Dollars in thousands except per share data SALES $ 13,617,485 13,218,715 + 3.0 12,955,488 11,787,843 11,082,169 Per diluted share $ 91 88 + 3.4 85 79 74 GROSS PROFIT $ 3,623,917 3,315,853 + 9.3 3,093,244 2,723,307 2,534,488 Percent of sales 26.6 25.1 23.9 23.1 22.9 OPERATING AND ADMINISTRATIVE EXPENSES $ 3,374,905 3,093,767 + 9.1 2,802,712 2,461,883 2,269,803 Percent of sales 24.8 23.4 21.6 20.9 20.5 TAXES Federal, state and local $ 302,274 284,737 + 6.2 287,758 260,885 261,319 Per diluted share $ 2.03 1.90 1.89 1.74 1.75 NET EARNINGS $ 198,620 204,443 - 2.8 255,634 232,187 216,117 Per diluted share $ 1.33 1.36 - 2.2 1.68 1.55 1.45 Percent of sales 1.5 1.5 2.0 2.0 2.0 EBITDA $ 676,735 632,757 + 7.0 656,857 569,256 520,162 EBITDAR $ 1,089,181 1,015,587 + 7.2 1,009,703 890,720 809,235 DIVIDENDS PAID ON COMMON STOCK $ 150,923 144,165 + 4.7 134,042 116,506 107,384 Per share (present annual rate $1.02) $ 1.02 .96 + 6.3 .885 .78 .72 NET CAPITAL EXPENDITURES $ 369,636 423,105 - 12.6 361,961 371,563 277,657 DEPRECIATION AND AMORTIZATION $ 330,408 291,236 + 13.5 248,287 200,931 157,392 At Year End Working capital $ 228,581 195,358 + 17.0 388,712 414,923 486,242 Current ratio 1.2 to 1 1.1 to 1 1.4 to 1 1.4 to 1 1.6 to 1 Shareholders’ equity $ 1,368,883 1,337,494 + 2.3 1,342,296 1,230,592 1,055,685 Percent of equity to total capitalization 96.6 96.1 95.7 94.1 92.5 Total shares outstanding (000’s) 148,531 148,876 - 0.2 151,685 151,122 148,352 Stores in operation 1,168 1,174 - 0.5 1,178 1,175 1,159 Return on average equity (%) 14.7 15.3 19.9 20.3 21.2 LARGER STORES SERVE TODAY’S CUSTOMERS • At June 24, 1998, • 82 percent of our we operated 1,168 stores now have at 1,178 1,200 1,175 1,174 stores, of which 215 least 35,000 square 1,168 1,159 were less than feet, compared with 1,000 35,000 square feet, 53 percent in 1994. 479 were 35,000 to 800 • Our average square 45,000 square feet footage per store 600 and 474 were more increased to 42,400 than 45,000 square this year, compared to 400 feet. 35,100 in 1994. 200 1994 1995 1996 1997 1998 Stores 35,000 to Stores more than Stores less than 1 45,000 square feet 45,000 square feet 35,000 square feet
  4. 4. SETUP CONTENT L ast year, our annual one of the indicators we will continue to watch in the months ahead as more shoppers visit our Winn-Dixie message to you began Marketplace stores. with these words: “1997 was a year of In business, as in life, success comes to those positioning Winn-Dixie for the future. As we approach who prepare. That is the strategy we are pursuing. It is the millennium, we are better prepared than ever for why, for example, we are concentrating on associate the years ahead.” training to ensure that Exceptional Customer Service When I signed those words along with James will truly be a Kufeldt and Charles McKellar, we had our eyes on an way of life in our important milestone. In the year 2000, our Company stores. Winn-Dixie will celebrate its 75th year in business. We remain today is without excited about the Winn-Dixie we are building for the question in a next century. better position for the future than we would have been MESSAGE TO without the OUR SHAREHOLDERS capital investment and operating improvements we Am I satisfied with our earnings for the year have made. just completed? Of course not. We had hoped for We also better results sooner, but we are absolutely confident want to express of our strategy. It would be a mistake for us not to our gratitude to T.E. (Tommy) McDonald, Senior Vice complete the investment and operating improvements President and Regional Director of our Charlotte and we have been making to create the Winn-Dixie of the Raleigh Divisions, who retired in December after 43 21st century. years of service. Upon his retirement, we realigned Giving customers the finest one-stop shopping regional responsibilities (see page 12). We also want to experience in the supermarket industry has required us extend our appreciation to Bob B. Tripp, President of to defer temporarily what could have been larger short- our Charlotte Division, who retired in March after term sales and earnings increases. Our philosophy is more than 43 years of service. to accomplish our objectives without long-term debt. We thank all of you for your support. And we This places all of us in a stronger financial position — invite you to come see us and enjoy the Winn-Dixie shareholders, associates and customers. Marketplace experience! We accomplished a lot in 1998. Our average store size increased to 42,400 square feet. More than 84% of our business was being done in our larger locations by year’s end. We added more new customer A. Dano Davis, Chairman, Principal Executive Officer services than ever before in our history. Our sales were a record $13.6 billion. And our net earnings were $198.6 million. As we finished the year, our identical store sales for the fourth quarter were up 3.1 percent compared with the fourth quarter of the previous year. That is 2
  5. 5. SETUP CONTENT I n 1998, more than two can continue to operate our new Winn-Dixie Marketplace stores in a way that enables our customers million customers visited to have the best possible shopping experience when our stores every day, seeing firsthand the they visit us. continuing improvements we are making to stay at the At our corporate headquarters in Jacksonville, forefront of the supermarket industry. Even as total Florida, we are taking additional steps to consolidate industry retail space in the United States grew during our office facilities into one building with the latest the year, we maintained our strong leadership position information and communications systems. We also among the major chains. moved to address Year 2000 computer issues well in As one sign of our com- advance, instead of waiting for the eve of the mitment to one-stop shopping millennium. convenience, we opened our All of these milestones reflect our commitment 639th pharmacy, making us the to making sure that Winn-Dixie remains a premier fastest-growing retail drug store supermarket of choice in the face of competition and operator in the country. We changes in consumer preferences. In 1999, as part of opened 84 new Winn-Dixie that commitment, we plan to open 85 new stores and Marketplace stores during the enlarge or remodel 90 existing stores. year, enlarged or remodeled We want to thank our associates for their another 136 stores and closed 90 community involvement. Winn-Dixie in 1998 gave smaller stores. Our facilities today are truly the most $12.8 million to support customer and associate efforts up-to-date in the business. to improve their communities. This total included By the end of the year, we had 1,168 stores with matching grants which doubled our associates’ own retail space of more than 49.6 million square feet, an donations of more than $2.0 million to civic and increase of 3.7 percent over 1997. We are excited about charitable organizations of their choice. the quality of our new Winn-Dixie Marketplace stores, With the dedication this year of the new including the variety of products and services they offer Winn-Dixie Hope Lodge in Atlanta, Georgia, we now to today’s busy shoppers. Indeed, in 1998, we added a have three Hope Lodges (including Miami and record total of 676 departments. To increase public Gainesville, Florida) giving cancer outpatients and a awareness of this fact and to invite even more family member a home-like place to stay at no charge customers to shop with us, we have been promoting during treatment. the theme “While You’re At The Marketplace” in our We remain confident in our business approach, communications to emphasize how much we offer grateful for the customers we have the privilege of under one roof. serving and are more enthusiastic than ever about the To help make sure we achieve our objectives, days ahead. we have made a significant investment in technology and training. Shoppers at many Winn-Dixie Marketplace locations were given the option of self- checkout, just one of the technological advances we James Kufeldt President are making to continue offering a fast and pleasant shopping experience. And we are providing our associates with advanced training to ensure that they 3
  6. 6. SETUP CONTENT W e took many mean that more customer needs can be met conveniently in one place during one visit. At significant practical most of our locations, there are customer service managers at the front of the store whose job is to steps in 1998 to enhance our make sure that our customers can check out operations and to give those who shop with us a with fast, friendly service. lot of positive reasons to keep coming back. We are proud of our 139,000 associates We moved ahead with a major who keep our stores running well. Today’s restructuring of our facilities in the Carolinas, Winn-Dixie associates receive pay and benefits for example. We opened a new retail support among the best in the industry, plus the center (warehouse) in Clayton, North Carolina, opportunity for additional training and with more than one million square feet, advancement. We are grateful for their dedicated replacing our smaller facility in Raleigh, North service to our customers and for the support Carolina; and we closed the retail support center they voluntarily provide to worthwhile causes in Greenville, South Carolina. We moved stores including youth mentoring, health and education between our Raleigh and programs and disaster relief in the communities Charlotte divisions to where they live and work. balance the volume. The From their individual acts of kindness to Greenville retail support their involvement in organized programs like the facility is being renovated, Special Olympics and inner city recreation, our enlarging the capacity of associates make a positive difference in the lives our general merchandise of many people from all walks of life. We thank center there. Our plans all of them for their commitment to their also include an enlargement customers and their communities. of our Charlotte, North Carolina, retail support center. We also opened a retail support center for Charles H. McKellar perishable goods in Montgomery, Alabama. And Executive Vice President we are planning a new, larger retail support center in Jacksonville, Florida. In conjunction with these improvements, we have increased the efficiency of our inventory system, which will A SPECIAL SALUTE help ensure that customers visiting our stores can always find what they want at any time. We extend a special salute to our associates who Our store interiors are better than ever, received annual Founders Awards as Associate with more departments, additional emphasis on Good Citizens of the Year in their divisions as part customer assistance and special products and of our Good Citizenship program: Elease Nicely, services tailored to the needs and lifestyles of the Atlanta; Nancy Lowery and William “Sonny” Boroughs, Charlotte; Dwayne Thomas, people who walk through our doors. Our Jacksonville; Joshua Swink, Ft. Worth; Katherine number of pharmacies, for example, rose 17.5 Stagg, New Orleans; Carolyn and Bill Marshall, percent last year. By the end of the year, we also Miami; Joseph Pack, Raleigh; Tom Martin, had a 19.3 percent increase in the number of Montgomery; Jennifer Wilson and Edward Papin, bakeries and a 41.2 percent increase in the Midwest; Lynn McLendon, Orlando; and Bruce number of stores with banks. More departments LaRocca, Tampa. 4
  7. 7. SETUP CONTENT PER STORE AVERAGE SQ. FOOTAGE SQUARE FOOTAGE TOTAL RETAIL STORE (in thousands) (in millions) 44 50 42 48 40 46 38 44 36 42 34 40 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 W Marketplace today and have a look around. You will hile you’re at the notice Harvest Fresh produce that includes the season’s Winn-Dixie Marketplace best garden variety selections, along with more exotic these days, you can enjoy an expanding roots and herbs, plus a colorful fruit and vegetable bar variety of convenient services and quality products, all with an assortment of fresh-cut items. You will also provided by friendly associates whose goal is to give see an oven fresh bakery featuring breads and pastries to suit every taste, where you can choose from more than 100 cake designs for special occasions and ISN’T LIFE DELICIOUS our farm fresh dairy products, often including an international cheese shop. If you visit Fisherman’s Wharf, you can you the best one-stop shopping experience select from a catch of fresh seafood that we will that the supermarket industry offers. steam and season upon request at no additional Our promise charge. Our Prestige Meat remains 100 percent shop features the WD Brand customer satisfaction. U.S. Choice aged beef that To deliver on this made us The Beef People, promise, we stock along with pork, lamb and thousands of different poultry. Our meat selections food and nonfood items include oven-ready entrees, and offer dozens of marinated meats and any personal services. We custom, thin or other special strive to make sure every cut you like. customer receives value, For your convenience, which means both the Winn-Dixie quality and competitive Marketplace offers prices, as well as meals and servings courteous, individual prepared to any stage that attention. fits your plans — from Walk into a completely cooked carry-out Winn-Dixie 5
  8. 8. SETUP CONTENT PHARMACIES 700 600 500 400 300 200 1994 1995 1996 1997 1998 ONE-HOUR PHOTO LABS 600 500 400 Our pharmacy coordinators help manage our growing number of pharmacies, 300 where customers can have their prescriptions filled while they shop. 200 dinners to items you can simply put in the oven or 100 microwave yourself when you get home. You might 0 decide to stop by our Deli-Cafe and enjoy a snack right 1994 1995 1996 1997 1998 there, near the soup and salad bar, and perhaps pick up a cooking tip from one of our in-store chefs while you sit BAKERY DEPARTMENTS down and take a break. We have hot and 700 cold deli offerings from sliced meats 600 and cheeses, sandwiches and subs, to chef-prepared hot entrees with your 500 favorite sides 400 and a variety of festive 300 party platters. 200 Many of our 1994 1995 1996 1997 1998 locations today are IN-STORE BANKS open 24 hours 250 a day, seven 200 days a week. On 150 our shelves 100 throughout the Winn-Dixie Marketplace are thousands of national 50 brand and private label products from which to choose. 0 When you walk through the aisles, you will notice not 1994 1995 1996 1997 1998 6
  9. 9. SETUP CONTENT Since our founding 73 only the abundance of food years ago, the corner grocery items, but expanded specialty store has evolved into a mod- sections and departments ern supermarket from which including health and beauty today’s shoppers and their fami- aids, greeting cards, books and lies demand much more. We magazines and household have operated successfully all supplies — more variety under these years by keeping focused one roof than ever before. on what our customers want You also will find more and delivering it. in-store services than you Putting our customers might expect. A floral shop first remains our philosophy with gifts and fresh-cut flowers today — to make sure that for Mother’s Day, weddings, our customers can count on Valentine’s Day or just to show the quality products and someone you care. A one-hour services they want every time photo lab where you can get they visit us. quality prints, enlargements While you’re at the Winn-Dixie Marketplace, and slides, as well as film, cameras, batteries, frames we are determined to give you the best one-stop shop- and albums. And at many Winn-Dixie Marketplace ping experience in the business. Come see for yourself locations, convenient dry cleaning services are and enjoy! available. Today’s Winn-Dixie Marketplace is also designed with financial services in mind. When you enter the store, you will find an ATM inside for your safety and convenience. At an increasing number of locations, we have full-service in-store bank branches for our customers. Other features available at our stores include money orders and cash transfers along with such extras as UPS shipping, postage stamps and pre- paid phone cards. Our in-store pharmacy makes it convenient for you to have your prescriptions filled while you shop. We offer brand-name prescription medicines, plus a full line of generic drugs. Our pharmacist on duty is avail- able for personal counseling about your prescriptions and our stores are adding new Mayo Clinic Health Information Centers where you can obtain health tips. We are committed to giving our Winn-Dixie Marketplace customers real value, which means quality products and services at the low prices people expect at Our district managers regularly visit our stores to ensure ongoing Winn-Dixie. excellence in serving our customers. 7
  10. 10. FINANCIAL REVIEW SETUP CONTENT Results of Operations During 1998, the Company began its consolidation of our accounting departments to During fiscal year 1998, we continued our focus corporate headquarters. The opening of our new on preparing our retail stores, not only for today’s distribution facility in Raleigh, North Carolina, resulted customer, but for our customers in the coming in the closing and the sale of the older Raleigh millennium. While we had hoped that our current distribution facility; the closing of the Greenville, South year’s results would have been better, we are committed Carolina distribution facility which will be converted to stay the course and reach for our longer-term into a general merchandise facility; and the objectives. reorganization of our Raleigh and Charlotte divisions. Sales for 1998 totaled $13.6 billion, a 3.0% The Company experienced a nonrecurring increase over 1997. The Company experienced a 0.3% administrative charge totaling $18.1 million (after tax, decrease in identical store sales in 1998, as compared to $11.0 million or $0.07 per diluted share) due to these a decrease of 0.9% in 1997. Sales for the fourth quarter activities. were $3.3 billion, a $188.4 million increase, or 6.2% Cash discounts and other income totaled $115.4 over the comparable quarter last year. The fourth million in 1998 and $119.4 million in 1997. quarter sales increase was produced by aggressive Interest expense, which consists primarily of a pricing and increased promotional activity. computation of interest on capital lease obligations and During 1998, our Company opened and acquired from short-term borrowings, totaled $28.5 million in 84 additional stores averaging 50,000 square feet and 1998, as compared to $22.1 million in 1997. The closed 90 smaller and older stores averaging 30,500 increase in interest expense reflects the increase in square feet. We also enlarged or remodeled 136 store short-term borrowings. locations. On June 24, 1998, we operated 1,168 stores Earnings before income taxes decreased from averaging 42,400 square feet, as compared to 1,174 $319.4 million in 1997 to $317.8 million in 1998. The stores averaging 40,700 square feet in 1997 and 1,178 decrease in pretax earnings is primarily a result of the stores averaging 38,800 square feet in 1996. Total retail increase in operating expenses as previously mentioned. store square footage has increased from 45.7 million in Income tax expense increased from $115.0 1996, to 47.8 million in 1997 and to 49.6 million in million in 1997 to $119.2 million in 1998, due to the 1998. effective income tax rate increasing from 36.0% in 1997 Our marketing strategy is designed to provide to 37.5% in 1998. The effective tax rate reflects a our customers with the best quality, variety and service change made by the Health Insurance Portability and at competitive prices. During 1998, our gross profit Accountability Act of 1996, whereby certain deductions dollars increased $308.1 million and our gross profit for interest relating to indebtedness with respect to margin increased from 25.1% in 1997 to 26.6% in 1998. certain corporate owned life insurance (COLI) policies Operating margins improved with an increase in the are being phased out over a three-year period. number of larger stores, added service departments and Net income for 1998 totaled $198.6 million, as improved pricing. compared to $204.4 million in 1997, a 2.8% decrease. Approximately 88% of our inventories are Earnings per diluted share totaled $1.33 in 1998, as valued under the LIFO (Last-In, First-Out) method. Our compared to $1.36 in 1997, a decrease of $0.03 per LIFO valuations of inventories resulted in an increase in share. gross profit of $12.1 million in 1998, as compared to a In 1998, our Company experienced deflation in decrease of $2.7 million in 1997. In 1998, our Company our LIFO computation. The computation resulted in an experienced deflation in product costs. increase in net earnings of $7.4 million, or $0.05 per Increases in depreciation expense, occupancy diluted share in 1998, as compared to a decrease in net costs, a higher payroll percentage in our larger stores earnings of $1.6 million, or $0.01 per diluted share in and training costs associated with our emphasis toward 1997. increased customer service were the major contributing The Company’s goal of a 20.0% return on factors of our increase in operating and administrative average equity was not attained in 1998 or 1997. Our expenses in 1998. Operating and administrative return on average equity was 14.7% in 1998 and 15.3% expenses, as a percent of sales, were 24.8% in 1998, as in 1997. For the past 5 years, our return on average compared to 23.4% in 1997 and 21.6% in 1996. equity has averaged 18.3%. 8
  11. 11. SETUP CONTENT Liquidity and Capital Resources was outstanding under these facilities, as compared to $380.0 million on June 25, 1997. The Company’s financial condition remains The Company believes that both its short-term sound and strong at year end. Excluding obligations and long-term capital needs will be sufficiently provided under capital leases, we have no financial long-term through the cash flow generated by its normal business debt. Shareholders’ equity increased $31.4 million and operations and its available financing programs. our equity to total capitalization ratio increased from 96.1% in 1997 to 96.6% in 1998. Cautionary Statement Regarding Cash and cash equivalents increased from $14.1 Forward-Looking Information and million in 1997 to $23.6 million in 1998. Cash Statements provided by operating activities amounted to $464.5 million in 1998 and $413.9 million in 1997. This Annual Report contains certain Capital expenditures in 1998 totaled $369.6 information that constitutes “forward-looking million, a $53.5 million decrease from 1997. This statements” within the meaning of the Private decrease is attributable to a decline in asset purchases Securities Litigation Reform Act, which involves risks and an increase in sales of assets. When considering the and uncertainties. Actual results may differ materially capital investment of our landlords for leased premises, from the results described in the forward-looking the capital investment in 1998 relating to facilities statements. When used in this document, the words, operated by our Company is estimated to be $850.0 “estimate,” “project,” “intend,” “believe,” and other million. Total capital investment for 1999 is estimated similar expressions, as they relate to the Company, are to be $800.0 million. There are no material intended to identify such forward-looking statements. construction or purchase commitments outstanding as Such statements reflect the current views of the of June 24, 1998. Company and are subject to certain risks and Since the timing of cash inflows and outflows is uncertainties that include, but are not limited to, not always the same, the Company has authorized a growth, competition, inflation, pricing and margin $500.0 million Commercial Paper Program. In support pressures, law and taxes. Please refer to discussions of of this program, or as an independent source of short- these and other factors in this Annual Report and other term funds, the Company also has available $495.0 Company filings with the Securities and Exchange million in short-term bank lines of credit, which are Commission. The Company disclaims any intent or renewable on an annual basis. These immediately obligation to update publicly these forward-looking available financing programs can be used for any general statements, whether as a result of new information, corporate purpose. On June 24, 1998, $420.0 million future events or otherwise. EARNINGS AND DIVIDENDS AVERAGE ANNUAL SALES PER RETURN ON EQUITY PER SHARE STORE IN MILLIONS OF DOLLARS 12.0 11.7 $2.00 11.3 11.5 1.68 25% 11.0 1.55 11.0 1.50 21.2 1.45 1.36 20.3 Goal 1.33 19.9 20 10.5 15.3 10.0 14.7 1.00 1.02 15 0.96 10.0 0.885 9.6 0.78 10 0.72 .50 9.5 5 9.0 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 Earnings per diluted share Dividends per share Present Dividend Rate $1.02 per share 9
  12. 12. SETUP CONTENT CONSOLIDATED STATEMENTS OF EARNINGS Years Ended June 24, 1998 and June 25, 1997 1998 1997 Amounts in thousands except per share data Net sales $ 13,617,485 13,218,715 Cost of sales, including warehousing and delivery expenses 9,993,568 9,902,862 Gross profit on sales 3,623,917 3,315,853 Operating and administrative expenses 3,374,905 3,093,767 Consolidation and distribution facility closing charge 18,080 — Operating income 230,932 222,086 Cash discounts and other income, net 115,395 119,435 346,327 341,521 Interest expense 28,535 22,079 Earnings before income taxes 317,792 319,442 Income taxes 119,172 114,999 Net earnings $ 198,620 204,443 Basic earnings per share $ 1.34 1.36 Diluted earnings per share $ 1.33 1.36 CONSOLIDATED BALANCE SHEETS June 24, 1998 and June 25, 1997 Assets 1998 1997 Amounts in thousands Current assets: Cash and cash equivalents $ 23,566 14,116 Trade and other receivables, net 146,166 175,679 Merchandise inventories at lower of cost or market less LIFO reserve of $212,869,000 ($224,999,000 in 1997) 1,404,917 1,249,215 Prepaid expenses 161,141 148,961 Total current assets 1,735,790 1,587,971 Investments and other assets 140,450 182,628 Deferred income taxes 22,626 22,129 Net property, plant and equipment 1,169,848 1,128,681 $ 3,068,714 2,921,409 Liabilities and Shareholders’ Equity Current liabilities $ 1,507,209 1,392,613 Obligations under capital leases 48,580 54,026 Defined benefit plan 37,102 33,452 Reserve for insurance claims and self-insurance 93,514 94,783 Other liabilities 13,426 9,041 Shareholders’ equity 1,368,883 1,337,494 $ 3,068,714 2,921,409 10
  13. 13. SETUP CONTENT N ew York Stock v v Winn-Dixie Charlotte honored New York Stock Exchange Listing Transportation s (2/18/52) WIN Number of tractors — 1,100 teachers at the ninth annual s Exchange Number of trailers — 2,100 Winn-Dixie Golden Apple Awards s Listing Number of drivers — 1,300 sponsored with WYFF-TV. s Miles traveled — 71 million Winn-Dixie Jacksonville sponsored (2/18/52) WIN s s Amount of merchandise “Drive for Meals,” a golf tourna- s delivered — 6.1 million tons ment held to support the Meals on v Year Founded — 1925 Wheels program. v Retail Automation v Sales — $13.6 Billion Winn-Dixie Miami associates paid s Mini computers are in all retail s 64 consecutive years of sales s for and built a Habitat for locations increases Humanity home in Ft. Lauderdale, Labor scheduling s Average annual sales per store — s completing construction in just six Check verification s $11.7 million weeks. Computer-assisted ordering s Federal, state and local taxes — s Winn-Dixie Montgomery provided s Time and attendance s $302.3 million disaster relief to the American Red Work planning s Taxes per diluted share — $2.03 s Cross for victims of the Interviewing s Earnings per diluted share — $1.33 s Birmingham area tornadoes. Electronic mail s Dividends per share — $1.02 s Winn-Dixie Midwest raised money s Electronic scale monitoring s (Present annual rate — $1.02) for the American Cancer Society Direct-delivery receiving s v Number of Associates — 139,000 with Celebrity Baggers Day at In-store accounting s Winn-Dixie and Thriftway stores. v Number of Stores — 1,168 Electronic payment system s Winn-Dixie New Orleans helped s Total square footage — 49.6 million s v Environmental Statement revitalize New Orleans area play- Average square footage per store — s Recycling is important to our envi- s grounds through its Diamond of 42,400 ronment and to our Company. Dreams program. Number of communities served — s Last year, we supplied more than Winn-Dixie Orlando made a five- s over 700 196,000 tons of paper and card- year pledge to the Central Florida board to recycling companies. The Boy Scouts Council to make Company also collects plastic and WINN-DIXIE improvements in a former hunting paper bags from our customers for lodge turned Scout camp. recycling. AT A GLANCE Winn-Dixie Raleigh collected a s record 226,000 pounds of canned M ajor goods for the needy on Winn-Dixie Contributions Day at the North Carolina State v Real Estate Development Fair. to Our Enlarged/ Winn-Dixie Tampa raised money v Major Contributions to Our s New Remodeled Community to fight muscular dystrophy at the Community 1998 84 136 fifth annual MDA Golf s 1999 (Projected) 85 90 Tournament. s Winn-Dixie presented Good s Winn-Dixie Texas again supported Citizenship Awards, along with v 22 Manufacturing Facilities s the Texas Speedway Children’s more than $ 6.3 million, to hun- Ice cream and milk bottling s Charities, helping needy children dreds of civic, youth, service and Coffee, tea and spices s in Texas and Oklahoma. educational organizations. Detergents s Winn-Dixie Stores Foundation Meat processing s s contributed over $4.4 million to Jams, jellies, peanut butter and s OHIO 20 community organizations, includ- condiments INDIANA VIRGINIA 2 35 ing $2.0 million in associate Canned and bottled carbonated KENTUCKY s 61 matching grants. beverages NORTH CAROLINA 126 TENNESSEE 23 Individual stores Egg processing s OKLAHOMA SOUTH CAROLINA 5 77 gave another $2.1 Cheese products s GEORGIA ALABAMA 119 million in 101 Crackers, cookies and snacks s TEXAS financial Oleomargarine 67 s MISSISSIPPI 15 and in-kind Frozen pizza s FLORIDA LOUISIANA 427 77 contributions. Cottage cheese and yogurt s BAHAMAS Winn-Dixie Atlanta Paper bags s 13 s made possible the new v Total Stores – 1,168 v 17 Warehouse and Distribution Winn-Dixie Hope Lodge Centers in Atlanta, Georgia, for cancer Items stocked — 34,800 s patients and their visiting family Tonnage — 5,987,000 s members. 11
  14. 14. MANAGEMENT SETUP CONTENT Board of Directors A. Dano Davis James Kufeldt Julia B. North Chairman and Principal President President and Chief Executive Officer of VSI Enterprises, Inc. ∆ • Executive Officer + Radford D. Lovett Robert D. Davis Carleton T. Rider Chairman, Commodores Point Terminal Corporation + ∆ • Chairman, DDI, Inc. + Continuous Improvement Officer, Mayo Foundation ∆ • Armando M. Codina Charles H. McKellar Chairman, Codina Group, Inc. ∆ • Charles P. Stephens Executive Vice President Vice President, T. Wayne Davis David F. Miller Norman W. Paschall Co., Inc. + ∆ Chairman, Transit Group, Inc. + Private Investor ∆ ∆ - Audit Committee + - Nominating Committee • - Compensation Committee Management, their ages and years of service: Division Presidents and Executive Committee Corporate Vice Presidents Corporate Officers A. Dano Davis, 53, 30 R. J. Brocato, 54, 34 B. C. Baxter, 52, 32 Chairman and Principal Executive Officer President, Atlanta Division Vice President 97 Stores Director of Marketing James Kufeldt, 59, 37 President and Chairman of W. C. Calkins, 59, 39 D. H. Bragin, 54, 37 Executive Committee President, Jacksonville Division Treasurer and Principal Accounting Officer 99 Stores Charles H. McKellar, 60, 41 W. F. Brim, 62, 45 Executive Vice President J. W. Critchlow, 51, 30 Vice President President, Raleigh Division Director of Seafood Merchandising H. E. Hess, 58, 40 121 Stores Senior Vice President, Regional Director J. H. Childers, 59, 42 of Atlanta, Orlando, Montgomery and R. J. Ehster, 57, 40 Vice President New Orleans Divisions President, Miami Division Director of Grocery Merchandising 116 Stores R. A. Sevin, 55, 37 G. E. Clerc, Jr., 63, 37 Senior Vice President, Regional Director J. D. Fitzgerald, 48, 27 Vice President of Tampa, Miami, Fort Worth and President, Charlotte Division Director of Public Relations Midwest Divisions 138 Stores J. L. Cooper, 64, 45 C. E. Winge, 53, 35 D. G. Lafever, 49, 31 Vice President Senior Vice President, Regional Director President, Orlando Division Director of Manufacturing of Jacksonville, Charlotte, Raleigh and 105 Stores J. W. Dixon, 56, 34 Bahama Divisions R. C. Lunn, 46, 29 Secretary L. H. May, 53, 33 President, New Orleans Division R. L. Hutton, 46, 31 Vice President 86 Stores Vice President Director of Associate Relations/Human H. E. Miller, 66, 42 Director of Government Relations Resources President, Montgomery Division D. J. Ledford, 62, 45 R. P. McCook, 45, 14 126 Stores Vice President Financial Vice President and L. J. Sadlowski, 57, 41 Director of Meat Merchandising Principal Financial Officer President, Fort Worth Division T. M. Moon, 48, 30 E. E. Zahra, Jr., 51, 4 72 Stores Vice President Vice President J. A. Schlosser, 49, 31 Director of Deli/Bakery Merchandising General Counsel President, Midwest Division C. R. Raulerson, 55, 38 85 Stores Vice President M. A. Sellers, 44, 25 Director of Information Systems President, Tampa Division D. J. Richardson, 48 ,32 110 Stores Vice President Director of Produce and Floral Operations W. H. Sutton, 51, 27 Vice President Director of General Merchandise A. C. Webb, 57, 38 Vice President Director of Services 12
  15. 15. SHAREHOLDER INFORMATION SETUP CONTENT Shareholder Communications Corporate Headquarters Please address any inquiries or comments to: Winn-Dixie Stores, Inc. P. O. Box B First Chicago Trust Company of New York Jacksonville, Florida 32203-0297 Transfer Agent and Registrar Winn-Dixie Stores, Inc. Internet Address: P. O. Box 2500 Transfer Agent and Registrar Jersey City, New Jersey 07303-2500 Toll-Free Number: 1-888-U-CALL-WD First Chicago Trust Company of New York (1-888-822-5593) P. O. Box 2500 Jersey City, New Jersey 07303-2500 For Hearing Impaired: 1-201-222-4955 E-mail Address: Dividend Reinvestment Internet Address: The Company’s Dividend Reinvestment Plan allows or our shareholders who own at least 10 shares in certificate form to reinvest dividends on Winn-Dixie Shareholder Relations common stock automatically, without service charges Winn-Dixie Stores, Inc. or brokerage fees. Participating shareholders may also P. O. Box B supplement the amount invested with voluntary cash Jacksonville, Florida 32203-0297 investments on the same cost-free basis. Approximately The Company’s annual report to the Securities and 61% of the Company’s shareholders participate in the Exchange Commission on Form 10-K may be obtained Dividend Reinvestment Plan. More information may by any shareholder, free of charge, upon written request be obtained by contacting First Chicago Trust Company to the Company. of New York. Stock Market Listing Direct Deposit New York Stock Exchange The Company offers direct deposit of dividends Symbol: WIN to our shareholders. More information may be obtained by contacting First Chicago Trust Company Annual Shareholders’ Meeting of New York. You are cordially invited to attend the meeting to be held Wednesday, October 7, 1998, 9:00 a.m., at the Prime Osborn Convention Center, Room 102, 1000 West Water Street, Jacksonville, Florida. Formal notice of the meeting, a proxy and proxy statement are being mailed to shareholders of record as of the close of business on July 31, 1998. 13