Winn-Dixie Stores Inc is using the continuing reclassification of its discontinued operations in The Bahamas as part of the excuse why it needs more time to file its annual report with the US Securities and Exchange Commission.
In a document filed with the SEC this week, the company’s Sr. Vice President and Chief Financial Officer Benett Nussbaum explained the factors that propelled the company to make the request of the SEC.
He claimed that in preparing the annual financial statements executives discovered that they had not utilized certain carrybacks in the 2005 fiscal year that are expected to result in aggregate tax benefits to the tune of $11.5 million. Additionally the company has reached a tentative settlement agreement with the IRS on the amounts asseses for the 200-2002 tax years.
Company officials are said to be working on the appropriate adjustments to reflect the carrybacks and settlement adjustments in the financial statements.
“We are also completing the reclassification of discontinued operations within the Consilidated Statements of Operationa due to the exit during fiscal 2006 of approximately 350 stores and four distribution centres as well as the pending sale of our ownership interest in Bahamas Supermarkets Limited in June 2006,” Mr. Nussbaum wrote.
He continued to explaind that due to the Chapter 11 filing and the additional and critical demands that it has placed on the senior management’s time and attention to finalize the plan and solicit creditors for approval, company officials have been unable to complete all the requisite work necessary to file the annual report “without unreasonable effort or expense.”
Winn-Dixie expects to file the financial statements on or before September 26, according to Mr. Nussbaum.
The company filed a voluntary petition for reorganization under Chapter 11of the federal bankruptcy laws in the U.S. on February 21. In early August, it filed the proposed plan of reorganization and related disclosure statement and is in the process of soliciting creditors for the plan’s approval.
The Annual report is expected to reflect a net loss of approximately $350 million for the 2006 fiscal year compared to a net loss of some $833 million for the 2005 fiscal year. The earnings are expected to include impairment charges of approximately $15.6 million compared to $158.4 million in the prior fiscal year and restructuring gains, net of $7.7 million compared to restructuruing charges, net of $82.7 million in the prior fiscal year.
The net loss is expected to include a net gain from organization items of approximately $251.6 million for the 2006 fiscal year compared to $148.3 million for the 2005 fiscal year which includes primarily non-cash gains related to lease rejections.
BSL Holdings Limited recently purchased Winn-Dixie Holdings local stake in Bahamas Supermarkets Limited for $56 million, making it the majority shareholder of the organization which operates the 12 supermarket chain.
Barbados Shipping and Trading [BS&T] has expressed an interest in acquiring an equity position in the company.
The Nation newspaper based in Barbados reported recently that BS&T’s investment in BSL Holdings is pending the submission of an application to the Bahamian Government for approval to secure a 40 per cent shareholding in that company. Shareholding in BSL Holdings includes Bahamian pension funds, corporate entities and private individuals.
In addition, the newspaper reported that BS&T has been awarded a management oversight contract for the supermarket chain, but there was no local confirmation of that. Nine of the Bahamas Supermarkets stores trade as City Markets in New Providence, with the three others labeled as Winn Dixie in Grand Bahama.
By: Tameka Lundy, The Bahama Journal
