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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 29, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-2633
VILLAGE SUPER MARKET, INC.
- - --------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-1576170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
733 Mountain Avenue, Springfield, New Jersey 07081
(Address of principal executive offices) (Zip code)
(201) 467-2200
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No__.
Indicate the number of shares outstanding of the issuer's classes of
common stock as of the latest practicable date.
<TABLE>
<CAPTION>
December 6, 1994
<S> <C>
Class A, Common Stock, No Par Value 1,315,800 Shares
Class B, Common Stock, No Par Value 1,594,076 Shares
</TABLE>
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VILLAGE SUPER MARKET, INC.
INDEX
<TABLE>
<CAPTION>
Part I Page No.
Financial Information
Item 1. Financial Statements
<S> <C>
Consolidated Condensed Balance Sheets . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income. . . . . . . . . . 4
Consolidated Condensed Statements of Cash Flows . . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . . . 6
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 7-8
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 9
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exhibit 28 (a) . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
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Part 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
October 29, July 30,
1994 1994
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 5,809 $ 7,246
Merchandise inventories 25,047 25,273
Patronage dividend receivable 4,160 2,783
Miscellaneous receivables 3,541 2,259
Prepaid expenses 632 580
Total current assets 39,189 38,141
Property, equipment and fixtures, net 71,315 71,414
Investment in related party 9,454 9,416
Goodwill, net 11,079 11,138
Other intangibles, net 2,982 3,045
Other assets 1,661 1,639
Total assets $135,680 $134,793
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Current portion of long-term debt $ 5,096 $ 5,149
Accounts payable to related party 24,572 23,947
Accounts payable and accrued expenses 11,606 12,330
Deferred income taxes 815 815
Total current liabilities 42,089 42,241
Long-term debt, less current portion 37,889 36,933
Deferred income taxes 3,196 3,196
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares in 1994 and
1,758,800 shares in 1993 18,129 18,129
Class B common stock - no par value,
issued & outstanding 1,594,076 shares
in 1994 and 1,598,076 shares in 1993 1,035 1,035
Retained earnings 39,527 39,444
Less cost of treasury shares
(447,000 shares) (6,185) (6,185)
Total shareholders' equity 52,506 52,423
Total liabilities and shareholders'
equity $135,680 $134,793
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
13 Weeks Ended 12 Weeks Ended
October 29, 1994 October 23, 1993
<S> <C> <C>
Sales $ 167,366 $ 158,745
Cost of sales 126,740 119,805
Gross Margin 40,626 38,940
Operating and administrative expense 37,363 35,714
Depreciation and amortization expense 2,109 2,188
Operating income 1,154 1,038
Interest expense (net) 1,021 930
Loss on disposal of assets -- (81)
Income before provision for income taxes
and cumulative effect of accounting
change 133 27
Provision for income taxes 50 11
Income before cumulative effect
of accounting change 83 16
Cumulative effect of change in
accounting for income taxes -- 400
Net income $ 83 $ 416
Net income per share:
Weighted average number
of common shares outstanding 2,909,876 2,909,876
Income before cumulative effect
of accounting change $ .03 $ --
Cumulative effect accounting change $ -- $ .14
Net income $ .03 $ .14
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
13 Weeks Ended 12 Weeks Ended
October 29,1994 October 23,1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 83 $ 416
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Cumulative effect of accounting change -- (400)
Depreciation and amortization 2,109 2,188
Provision to value inventories at LIFO 175 100
Loss on disposal of assets -- 81
Changes in assets and liabilities:
(Increase) decrease in inventory 51 (2,040)
(Increase) in patronage dividend
receivable (1,377) (713)
(Increase) decrease in misc.
receivables (1,282) 885
(Increase) in prepaid expenses ( 52) ( 1)
(Increase) decrease in other assets ( 22) 697
Increase (decrease) in accounts payable
to related party 625 ( 11)
(Decrease) in accounts payable and
accrued expenses (724) (3,184)
(Decrease) in income taxes payable -- (265)
Net cash used by operating activities ( 414) (2,247)
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures (1,888) (1,391)
Proceeds from sale of assets -- 358
Investment in related party ( 38) ( 69)
Net cash used by investing activities (1,926) (1,102)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term
debt 4,100 4,100
Principal payments of long-term
debt (3,197) (5,418)
Net cash provided (used)
by financing activities 903 (1,318)
NET (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,437) (4,667)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,246 6,619
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 5,809 $ 1,952
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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VILLAGE SUPER MARKET, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of normal
and recurring accruals) necessary to present fairly the financial position as
of October 29,1994 and July 30, 1994 and the results of operations and cash
flows for the periods ended October 29, 1994 and October 23, 1993.
The significant accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements in the July 30, 1994 Village Super
Market, Inc. Annual Report.
Effective August 1, 1993, the Company adopted FASB Statement NO. 109,
"Accounting for Income Taxes." Under Statement 109, the liability method is
used in accounting for income taxes. Under this method, deferred tax assets
and liabilities are determined based on differences between financial reporting
and tax bases of assets and liabilities and are measured using the enacted tax
rates in effect.
As permitted by Statement 109, the Company elected not to restate the
financial statements of any prior years. There was no effect of the change in
accounting on pretax income for the periods presented. The cumulative effect
of the change increased net income by $400,000 ($.14 per share) in the quarter
ended October 23, 1993.
2. The results of operations for the period ended October 29, 1994 are not
necessarily indicative of the results to be expected for the full year.
3. At both October 29, 1994 and July 30, 1994 approximately 68% of merchandise
inventories are valued by the LIFO method while the balance is valued by FIFO.
If the FIFO method had been used for the entire inventory, inventories would
have been $6,643,000 and $6,468,000 higher than reported at October 29, 1994
and July 30, 1994, respectively.
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Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CON
RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
Sales increased 5.4% to $167,366,000 in the first quarter of fiscal 1995.
Sales increased due to the current years first quarter containing thirteen weeks
compared to twelve weeks in the prior year. This increase was partially offset
by stores closed since one year ago, including the closing of the Easton,
Pennsylvania store in August 1994. Same store sales were flat in the quarter
due to the continued sluggishness in the economy and the effects of new
competitive entries.
Gross margins as a percentage of sales decreased to 24.3% in the current
quarter compared with 24.5% in the corresponding quarter one year ago. Gross
margins declined due to high levels of sale item penetration and price
competition in the marketplace.
Operating and administrative expenses as a percentage of sales decreased to
22.3% from 22.5% in the prior year. This was due to decreased labor and
promotional costs as part of the Company's effort to make its operations more
efficient.
Interest expense increased in fiscal 1995 due to higher rates and higher debt
levels outstanding.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceed current assets by $2,900,000 at October 29, 1994
compared to $4,100,000 at July 30, 1994. The current ratio increased to .93 at
October 29, 1994 from .90 at July 30, 1994.
During the quarter, debt payments of $3,197,000, capital expenditures of
$1,888,000 and increases in non-cash working capital items were paid for by
increased use of the revolving line of credit. As a result, the Company
<PAGE> 8
increased the balance outstanding on its line of credit to $8,100,000 at
October 29, 1994 from $4,000,000 at July 30, 1994.
The majority of capital expenditures in the current quarter related to the
remodel and expansion of the Stirling, Hillsborough and Chester stores. The
Company has budgeted approximately $8,000,000 for capital expenditures this
fiscal year. The Company expects to finance these expenditures through
internally generated funds and borrowing under its credit facility.
On October 29, 1994, the Company was in compliance with all provisions of its
revolving/term loan agreement as amended on October 21, 1994. At October 29,
1994, the Company did not meet a cash flow to fixed charge coverage ratio
contained in two other debt agreements with a different lender. This does not
constitute an event of default. However, until this ratio is met or unless a
waiver is obtained, the agreements prevent the Company from borrowing additional
funds (other than the Company's revolving loan), declaring dividends and
executing new leases.
<PAGE> 9
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits:
Exhibit 28(a) - Press Release dated December 8, 1994
6(b) Reports on form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Village Super Market, Inc.
Registrant
Date: December 8, 1994 /s/ Perry Sumas
Perry Sumas (President)
Date: December 8, 1994 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
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EXHIBIT 28 (a)
VILLAGE SUPER MARKET, INC. REPORTS RESULTS
FOR THE FIRST QUARTER ENDED OCTOBER 29, 1994
Springfield, N.J. - December 8, 1994 - Village Super Market, Inc.
reported sales and net income for the quarter ended October 29, 1994,
Perry Sumas, President, announced today.
Net income was $83,000 in the first quarter of fiscal 1995 compared to
income before the cumulative effect of an accounting change of $16,000 in
the prior year. The prior year first quarter also included the
cumulative effect of a change in the method of accounting for income
taxes which increased net income by $400,000. First quarter sales
increased 5.4% to $167,366,000.
Sales increased due to the current quarter containing thirteen weeks
compared to the prior year's twelve weeks. Partially offsetting this
sales increase was the impact of stores closed since one year ago,
including the closing of the Easton, Pennsylvania store in August 1994.
Same store sales were flat in the current quarter due to the continued
sluggish economy and the effects of competitive openings.
Mr. Sumas commented that net income increased slightly as the Company
was able to reduce operating expenses to offset a decline in gross
margins. Gross margin percentages declined due to high levels of sale
item penetration and increased price competition. Operating expenses
declined due to more efficient use of labor and promotional costs.
Village Super Market, Inc. owns and operates a chain of 23
supermarkets under the ShopRite name in New Jersey and Eastern
Pennsylvania.
The following table summarizes Village's results for the quarter ended
October 29, 1994.
<TABLE>
<CAPTION>
13 Weeks Ended 12 Weeks Ended
October 29, 1994 October 23, 1993
<S> <C> <C>
Sales $167,366,000 $158,745,000
Income before cumulative
effect of accounting change $ 83,000 $ 16,000
Cumulative effect of
accounting change $ --- $ 400,000
Net Income $ 83,000 $ 416,000
Net Income Per Share:
Income before cumulative
effect of accounting change $ .03 $ --
Cumulative effect of
accounting change $ -- $ .14
Net Income $ .03 $ .14
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> JUL-29-1995
<PERIOD-END> OCT-29-1994
<PERIOD-TYPE> 3-MOS
<CASH> 5809
<SECURITIES> 0
<RECEIVABLES> 3541
<ALLOWANCES> 0
<INVENTORY> 25047
<CURRENT-ASSETS> 39189
<PP&E> 129614
<DEPRECIATION> 58299
<TOTAL-ASSETS> 135680
<CURRENT-LIABILITIES> 42089
<BONDS> 37889
0
0
<COMMON> 19164
<OTHER-SE> 33342
<TOTAL-LIABILITY-AND-EQUITY> 135680
<SALES> 167366
<TOTAL-REVENUES> 167366
<CGS> 126740
<TOTAL-COSTS> 126740
<OTHER-EXPENSES> 39472
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1021
<INCOME-PRETAX> 133
<INCOME-TAX> 50
<INCOME-CONTINUING> 83
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
