WINN » Topics » Liquidity and Capital Resources

This excerpt taken from the WINN 8-K filed Oct 27, 2009.

Liquidity and Capital Resources

As of September 16, 2009, Winn-Dixie had approximately $669 million of liquidity, comprised of $512 million of borrowing availability under its credit agreement and $157 million of cash and cash equivalents, an increase of $6 million from year end. The Company noted that its liquidity is sufficient to continue funding its capital program, and it does not expect any borrowings under its credit facility for fiscal 2010.

This excerpt taken from the WINN 8-K filed Oct 28, 2008.

Liquidity and Capital Resources

As of September 17, 2008, Winn-Dixie had approximately $653.1 million of liquidity, comprised of $491.2 million of borrowing availability under its credit agreement and $161.9 million of cash and cash equivalents.

Following the close of the first quarter of fiscal 2009, the Company reached a final settlement with its insurers related to its claim resulting from hurricanes that occurred in fiscal 2006. The Company received approximately $25.0 million on September 25, 2008, as a result. The cash received and the related gain on the settlement will be included in the Company’s results for the second quarter of fiscal 2009, but will be excluded from the Company’s Adjusted EBITDA.

This excerpt taken from the WINN 10-K filed Aug 25, 2008.

LIQUIDITY AND CAPITAL RESOURCES

STYLE="margin-top:6px;margin-bottom:0px">Summary

As of June 25, 2008, we had $657.2 million of liquidity,
comprised of $455.9 million of borrowing availability under the Credit Agreement and $201.3 million of cash and cash equivalents. We believe that we have sufficient liquidity through borrowing availability, available cash and cash flows from
operating activities to fund our cash requirements for existing operations and capital expenditures through fiscal 2009. Based on anticipated improvement in operating results and borrowing availability, we believe that we will have sufficient
resources beyond fiscal 2009 to operate our business and fund our capital expenditures.

This excerpt taken from the WINN 8-K filed Aug 1, 2008.

Liquidity and Capital Resources

As of June 25, 2008, Winn-Dixie had approximately $655 million of liquidity, consisting of approximately $201 million of cash and cash equivalents and approximately $454 million of borrowing availability under its credit agreement.

“We have done a great job managing our liquidity, which increased by approximately $62 million compared to fiscal 2007, even as we made significant investments of approximately $230 million into the business,” said Mr. Lynch.

Capital expenditures in fiscal 2009 are expected to total approximately $250 million, of which approximately $150 million is expected to be spent in support of the Company’s store remodeling program. In addition to the store remodeling program, the Company anticipates that during fiscal 2009 it will spend approximately $100 million on other capital expenditures, including maintenance and other store-related projects, information technology projects, new stores, back-up generators, and logistics.

This excerpt taken from the WINN 8-K filed May 13, 2008.

Liquidity and Capital Resources

As of April 2, 2008, the Company had $642.6 million of liquidity, an increase of $54.2 million compared to January 9, 2008. Liquidity for the quarter is comprised of $464.8 million of borrowing availability under the Credit Agreement and $177.8 million of cash and cash equivalents. The Company anticipates its capital expenditures for the remainder of fiscal 2008 will be funded substantially by cash flows from operations, working capital improvements, and cash on hand.

This excerpt taken from the WINN 8-K filed Feb 20, 2008.

Liquidity and Capital Resources

As of January 9, 2008, the Company had $588.4 million of liquidity, comprised of $446.6 million of borrowing availability under the Credit Agreement and $141.8 million of cash and cash equivalents and marketable securities. The Company anticipates its capital expenditures for the remainder of fiscal 2008 will be funded substantially by cash flows from operations and working capital improvements.

This excerpt taken from the WINN 8-K filed Oct 29, 2007.

Liquidity and Capital Resources

As of September 19, 2007, Winn-Dixie had approximately $598.4 million of liquidity, consisting of $207.4 million of cash and cash equivalents and $391.0 million of borrowing availability under its credit agreement.

The Company’s liquidity increased by $5.5 million from the end of its fourth fiscal quarter, primarily as a result of cash flow from operations and working capital improvements, partially offset by capital expenditures. Working capital improvements continue to be a focus for the Company.

This excerpt taken from the WINN 8-K filed Aug 28, 2007.

Liquidity and Capital Resources

As of June 27, 2007, Winn-Dixie had approximately $592.9 million of liquidity, consisting of $201.9 million of cash and cash equivalents and $391.0 million of borrowing availability under its credit agreement. The Company’s liquidity increased by $19.5 million from the end of its third fiscal quarter, primarily as a result of cash flow from operations, offset somewhat by capital expenditures.

This excerpt taken from the WINN 8-K filed May 15, 2007.

Liquidity and Capital Resources

As of April 4, 2007, Winn-Dixie had approximately $573.4 million of liquidity, comprised of $391.7 million of borrowing availability under its credit agreement and $181.7 million of cash and cash equivalents. The company’s liquidity increased by $73.8 million from the end of its second fiscal quarter, primarily as a result of cash flow from operations, income tax refunds, and higher borrowing availability, offset by capital expenditures.

This excerpt taken from the WINN 8-K filed Feb 23, 2007.

Liquidity and Capital Resources

As of January 10, 2007, Winn-Dixie had approximately $500 million of liquidity, comprised of $367 million of borrowing availability under its credit agreement and $133 million of cash and cash equivalents. The company anticipates that liquidity will decrease by approximately $80 million during the remainder of the fiscal year in connection with the acceleration of its store remodel and other capital expenditure programs and as it makes payments related to emergence from bankruptcy, offset by cash flow from operations and income tax refunds.

“We are pleased to have emerged from bankruptcy with virtually no debt and substantial borrowing capacity under our new Credit Facility,” said Lynch. “We are confident we have the liquidity we need to fund both our current business operations and our planned capital expenditure program.”

This excerpt taken from the WINN 10-Q filed May 16, 2005.

Liquidity and Capital Resources

 

As discussed previously, on February 21, 2005 we filed for judicial reorganization under Chapter 11 to address the financial and operational challenges that have hampered our recent performance.

 

We have $300.0 million of outstanding senior notes (the “Notes”) bearing interest at 8.875% per annum. The Notes were scheduled to mature in 2008, and required interest-only payments semi-annually until maturity. The Notes contain various affirmative and negative covenants customary to these types of agreements. The Chapter 11 filings created an event of default under the Notes. See Commitments and Contractual Obligations for further discussion. While operating under Chapter 11, we are prohibited from paying unsecured pre-petition debts, including the Notes and interest thereon. As of the Petition Date, in accordance with SOP 90-7, we have ceased accruing interest on all unsecured debt subject to compromise.

 

On February 23, 2005, the Court authorized Winn Dixie Stores, Inc. and five specified debtor subsidiaries, on an interim basis, to enter into the DIP Credit Facility. The obligations under the DIP Credit Facility are guaranteed by all of the Debtors and are secured by a lien on our assets, which lien has senior priority with respect to substantially all of our assets and by a super priority administrative expense claim in each of the Chapter 11 cases. The $800.0 million DIP Credit Facility consists of a $300.0 million letter of credit sub-facility and a $40.0 million term loan. This Form 10-Q contains only a general description of the terms of the DIP Credit Facility and is qualified in its entirety by reference to the full DIP Credit Facility agreement included as Exhibit 10.2 to a Current Report on Form 8-K filed February 24, 2005 and the amendment to the DIP Credit Facility dated March 31, 2005 and filed as Exhibit 10.4 to this Form 10-Q. The following capitalized terms have specific meanings as defined in the DIP Credit Facility agreement, as amended: Borrowing Base, Reserves, Excess Availability and EBITDA.

 

On February 23, 2005, the Court also authorized on an interim basis borrowings of up to $600.0 million under the DIP Credit Facility for payment of permitted pre-petition claims, working capital needs, letters of credit and other general corporate purposes. In March 2005, the Court gave final approval to the entire $800.0 million DIP Credit Facility and borrowings thereunder. The initial usage was approximately $440.0 million, of which approximately $267.0 million was used to repay the outstanding indebtedness under the Pre-petition Facility and approximately $161.8 million was issued as letters of credit in order to continue the letters of credit issued under the Pre-petition Facility. Approximately $10.0 million was used to pay various issue costs related to the DIP Credit Facility; these costs are being amortized over the two-year term of the facility.

 

At our option, interest on the revolving and term loans under the DIP Credit Facility is based on LIBOR or the bank’s prime rate plus an applicable margin. The applicable margin varies based upon the underlying rate and the amount drawn on the facility in relation to the underlying collateral (LIBOR plus 2.0% or the bank’s prime rate plus 0.5% at April 6, 2005). In addition, there is an unused line fee of 0.375%, a sub-facility letter of credit fee of 1.0%, a standby letter of

 

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credit fee of 1.75% and a letter of credit fronting fee of 0.25%. The DIP Credit Facility contains various representations, warranties and covenants that are customary for such transactions, including among others, reporting requirements and financial covenants. The financial covenants include tests of cash receipts, cash disbursements and inventory levels as compared with the rolling 12-week cash forecast provided to the bank group. In addition, we are required to provide the bank group with monthly projections starting no later than May 31, 2005. At that time, we will be subject to an EBITDA test and a capital expenditure test. At all times, Excess Availability is not permitted to fall below $100.0 million. As of April 6, 2005, we were in compliance with all covenants and requirements, and Excess Availability was approximately $424.5 million, as summarized below:

 

     April 6, 2005

 

Lesser of Borrowing Base or DIP Credit Facility capacity (net of Reserves of $249,804)

   $ 530,790  

Outstanding borrowings

     (106,277 )
    


Excess Availability as of April 6, 2005

   $ 424,513  
    


 

Our obligations under the DIP Credit Facility may be accelerated upon certain events of default, including any breach by us of any of the representations, warranties, or covenants made in the DIP Credit Facility agreement, the conversion of any of the Chapter 11 cases to a case under Chapter 7 of the Bankruptcy Code, or the appointment of a trustee or examiner pursuant to the Bankruptcy Code. The DIP Credit Facility will terminate on the earliest of (a) 24 months after the date of the initial loans, (b) the effective date of any confirmed plan of reorganization, and (c) the last termination date set forth in any interim or final order approving the DIP Credit Facility.

 

Prior to the Petition Date, our primary sources of working capital had been cash flows from operations, vendor trade credit, float from our primary bank related to ACH transactions and borrowings under our Pre-petition Facility. Wachovia Bank, N.A. served as administrative agent and lender under this facility. This facility has been paid in full from proceeds under the DIP Credit Facility and cancelled.

 

As discussed, we are operating as a debtor-in-possession under Chapter 11 of the Bankruptcy Code. As a result of the uncertainty surrounding our current circumstances, it is difficult to predict our actual liquidity needs and sources at this time. While the Chapter 11 cases proceed, our principal sources of liquidity are expected to be cash generated from operations and funds available under the DIP Credit Facility. Our principal uses of cash are expected to be administrative expenses of the cases, operating expenses, and debt service (including both interest payments under the DIP Credit Facility and payments made in respect of pre-petition debt in accordance with orders of the Court). We believe that our liquidity and capital resources will be sufficient to maintain our normal operations at current levels during the bankruptcy proceedings. However, our access to additional financing during these proceedings will likely be very limited.

 

The outstanding borrowing, including the revolving loan balance and the term loan, on the DIP Credit Facility was $106.3 million at April 6, 2005, compared to $153.0 million of revolving loans on the Pre-petition Facility at January 12, 2005. The average and peak borrowings on the revolving loans during the 12 weeks ended April 6, 2005 were $164.7 million and $277.7 million, respectively.

 

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At April 6, 2005, we had letters of credit totaling $171.6 million issued under the DIP Credit Facility. Of the total, $0.3 million are import letters of credit, and $171.3 million are workers’ compensation standby letters of credit. Additionally, $17.0 million in letters of credit have been issued outside of the DIP Credit Facility for workers’ compensation purposes and are secured by marketable securities valued at $19.5 million at April 6, 2005.

 

The following table sets forth certain Condensed Consolidated Statements of Cash Flow data (amounts in thousands) for the 40 weeks ended April 6, 2005 and March 31, 2004:

 

     40 Weeks Ended

 
     April 6, 2005

    March 31, 2004

 

Cash (used in) provided by:

              

Operating activities

   $ (94,368 )   158,131  

Investing activities

     (21,781 )   (183,997 )

Financing activities

     93,555     (20,386 )

 

Cash used in operations for the 40 weeks ended April 6, 2005 was $94.4 million which is substantially less than the net loss of $566.2 million due to non-cash items including asset impairment charges, valuation allowance on our deferred tax assets recognized during the second quarter, partially offset by non-cash gains related to rejected leases on 147 closed facilities. The cash effect of reorganization items included in cash used in operating activities of $3.3 million relates primarily to fees and retainers paid for professional services related to our bankruptcy proceedings including financial, legal, real estate and valuation services professionals.

 

We have experienced delays in receipt of payment from vendors related to various promotional allowance agreements causing a significant increase in trade and other receivables since the Petition Date. Certain vendors may seek through setoff or recoupment to apply amounts they owe us with respect to the pre-petition period to pre-petition liabilities owed to such vendors by us. In addition, since the Petition Date certain vendors require cash deposits upon ordering merchandise inventory.

 

Cash used in investing activities for the 40 weeks ended April 6, 2005 includes cash proceeds of $73.9 million from the sale of facilities.

 

Capital expenditures totaled $107.4 million and $161.8 million for the 40 weeks ended April 6, 2005 and March 31, 2004, respectively.

 

The current costs of our 2004 Restructure Plan, primarily severance and other closing costs, were funded from proceeds from the sale of facilities and operating cash flow. The future costs of lease payments on closed facilities will need to be funded from our available liquidity and may be reduced through future lease rejections for which settlement will be paid through a plan of reorganization.

 

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This excerpt taken from the WINN 10-Q filed Feb 15, 2005.

Liquidity and Capital Resources

 

As of September 22, 2004, our total liquidity was $352.5 million, which was comprised of $64.0 million in cash and cash equivalents and $288.5 million of net borrowing availability under the revolving credit facility as described below. The primary reason for the decline in liquidity, in addition to operating losses, was as of September 22, 2004 we failed to meet an EBITDA test that resulted in reducing available borrowings under our revolving credit facility by $100 million.

 

The following table sets forth certain Condensed Consolidated Statements of Cash Flow data:

 

     12 Weeks Ended

 
     September 22, 2004

    September 17, 2003

 

Cash provided by (used in):

              

Operating activities

   $ 19,647     18,070  

Investing activities

     (11,427 )   (36,687 )

Financing activities

     (1,012 )   (8,059 )

 

Cash provided by operations remained positive despite the net loss for the quarter, as a portion of the net loss was due to non-cash items related to the restructuring and goodwill and other asset impairment charges, along with reductions of inventory due to closure of two warehouses and the increase in sales due to hurricanes.

 

We require capital primarily for the implementation of our store upgrade program and investments in technology. We estimate that approximately two-thirds of the total projected capital investment in fiscal 2005 will be in these two areas, which includes support of our store upgrade program in the lead market and elsewhere. Capital expenditures totaled $24.5 million for the first quarter of fiscal 2005 compared to $37.7 million for the first quarter of fiscal 2004. We expect the level of capital expenditures for fiscal 2005 to be approximately $235.0 million, as compared to $203.6 million for fiscal 2004. Capital expenditures for new stores and major remodels are expected to be significantly less than the prior year as capital resources are used to support the store upgrade program.

 

During the first quarter of fiscal 2005, we received cash proceeds of $15.8 million from the sale of facilities, including inventory. Subsequent to the end of the quarter, we received $49.0 in payment of our fiscal 2004 income tax receivable.

 

We have a senior secured credit facility (the “Facility”) with a maximum borrowing capacity of $600.0 million. The Facility is secured by various assets including specified inventory, pharmacy accounts receivable, pharmacy scripts, and real estate. The borrowing capacity could be decreased due to reductions in inventory, asset disposals, reductions in appraisals, or other events. The Facility expires June 29, 2007, but contains provisions for possible renewal.

 

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The following capitalized terms have specific meanings as defined in the Facility Agreement: Borrowing Base, Reserves, Excess Availability and Adjusted Excess Availability. Refer to the Facility agreement filed on a Current Report on Form 8-K on June 29, 2004, for a full description of their meaning.

 

The Facility provides for a $400.0 million revolving credit facility, which also includes certain letters of credit, and a separate $200.0 million standby letter of credit facility. The maximum Borrowing Base is $600.0 million which is reduced by Reserves, letters of credit issued under the Facility and borrowings to arrive at Excess Availability. Adjusted Excess Availability utilizes actual collateral balances as the Borrowing Base and is then reduced in a similar computation.

 

Covenants under the Facility restrict capital expenditures, dividends, new debt arrangements, and acquisitions and dispositions of subsidiaries. The Company must maintain a minimum Excess Availability of $100.0 million to avoid measurement of the minimum earnings before interest, taxes, depreciation and amortization (“EBITDA”) test which, if not met, reduces the borrowing capacity by $100.0 million. As of September 22, 2004, the Company did not have the targeted level of EBITDA, thereby reducing the borrowing capacity by $100.0 million. Additionally, Adjusted Excess Availability must exceed $75.0 million at all times. At September 22, 2004, Excess Availability and Adjusted Excess Availability were calculated to be $426.3 million and $479.9 million, respectively.

 

There were no borrowings on the revolving line of credit during the 12 weeks ended September 22, 2004.

 

At September 22, 2004, we had letters of credit totaling $148.9 million issued under the Facility. $11.5 million of these are import letters of credit issued under the revolving credit facility, and $137.4 are workers’ compensation standby letters of credit issued under the standby letter of credit facility. Additionally, $17.0 million in letters of credit have been issued outside of the Facility for workers’ compensation and are secured by marketable securities valued at $19.4 million at September 22, 2004. We paid weighted-average commitment fees of 1.95% on the various outstanding letters of credit. Pricing for the revolving credit facility is at LIBOR plus 2.25% at September 22, 2004.

 

In addition to the Facility, we have $300.0 million of outstanding senior notes bearing interest at 8.875% per annum. The notes mature in 2008 and require interest-only payments semi-annually until maturity. Covenants require maintenance of a minimum fixed charge coverage ratio in order to incur additional indebtedness outside of the Facility or to make dividend payments. At September 22, 2004, we do not meet the minimum fixed coverage ratio of 2.25 to 1.0 and thus cannot incur additional indebtedness outside of the Facility or declare dividends until such time as the coverage ratio is met. On January 30, 2004, our Board of Directors suspended indefinitely the declaration of future quarterly dividends.

 

On January 30, 2004, Standard & Poor’s Rating Services lowered our corporate debt rating from BB to B and placed the rating on Credit Watch with negative implications. On July 29, 2004, Standard & Poor’s Rating Services affirmed our corporate debt rating of B and removed the credit watch. This rating still has a negative outlook. On July 8, 2004, Moody’s Investor Services lowered our senior implied ratings to B1 from Ba3 with a negative outlook. The change in the corporate debt ratings had no impact on covenants, pricing of our credit facility or the interest rate paid under the senior notes.

 

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We believe that current cash on hand, available trade credit, available borrowings under the revolving credit facility, anticipated cash flow from operations, cash increases as a result of improvements in working capital and the sale of assets from the execution of the asset rationalization plan will be sufficient to fund our current operating and capital needs. Full implementation of our store upgrade program throughout the entire chain will require us either to produce improved operating results or to secure additional sources of capital. Further, in addition to our strategic initiatives, other investments that we believe will be necessary – such as increasing the pace of our major remodeling activity – will require either improved operating results or additional funding.

 

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