FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 [Fee Required]. For the fiscal year ended July 29,
1995.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 [Fee Required] for the transition period from
____________ to _____________.
Commission file Number 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 No.)
733 Mountain Avenue, Springfield, New Jersey 07081
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201)-467-2200
Securities registered pursuant of Section 12 (b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
None None
Securities registered pursuant to Section 12(g) of the Act:
CLASS A COMMON STOCK, NO PAR VALUE
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
The aggregate market value of the Class A common stock of Village Super Market,
Inc. held by non-affiliates was approximately $7,086,254 and the aggregate
market value of the Class B common stock held by non-affiliates was
approximately $1,061,781 (based upon the closing price of the Class A shares on
the Over the Counter Market on October 6, 1995).
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of latest practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class October 24, 1995
<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>
DOCUMENTS INCORPORATED BY REFERENCE
Information contained in the 1995 Annual Report to Shareholders and the 1995
definitive Proxy Statement to be filed with the Commission and delivered to
security holders in connection with the Annual Meeting scheduled to be held on
December 8, 1995 are incorporated by reference into this Form 10-K at Part II,
Items 5, 6, 7 and 8 and Part III.
Part I
ITEM I. BUSINESS
GENERAL
The Company operates a chain of 21 ShopRite supermarkets, 15 of which are
located in northern New Jersey, 1 of which is in north-eastern Pennsylvania and
5 of which are in the southern shore area of New Jersey.
In addition, the Company operates two former ShopRite stores under a
"Village Market" format as described below. The Company's membership in
Wakefern Food Corporation ("Wakefern"), the nation's largest retailer owned food
cooperative and owner of the ShopRite name, provides the Company many of the
economies of scale in purchasing, distribution and advertising associated with
chains of greater size and geographic reach.
The Company believes that the regional nature of its business and the
continuity of its management under the leadership of its founding family have
permitted the Company to operate with greater flexibility and responsiveness to
the demographic characteristics of the communities served by its stores.
The Company seeks to generate high sales volume by offering a wide variety
of high quality products at consistently low prices. The Company attempts to
efficiently utilize its selling space, gives continuing attention to the decor
and format of its stores and tailors each store's product mix to the preferences
of the local community. The Company concentrates on development of superstores,
which, in addition to their larger size (an average of 50,000 total square feet,
including office and storage space, compared with an average of 30,000 total
square feet for conventional supermarkets), feature such higher margin specialty
service departments as an on-site bakery, an expanded delicatessen, a fresh
seafood section and, in most cases, a prescription pharmacy. Superstores also
offer an expanded selection of higher margin non-food items such as cut flowers,
health and beauty aids, greeting cards, videocassette rentals and small
appliances. Two recent superstores also include a warehouse section featuring
products in giant sizes. The following table shows the percentage of the
Company's sales allocable to various product categories during each of the
periods indicated as well as the number of the Company's superstores and
percentage of selling square feet allocable to these stores during each of these
periods:
<TABLE>
<CAPTION>
Product Categories Fiscal Year Ended In July
1993 1994 1995
<S> <C> <C> <C>
Groceries 44.2% 44.0% 44.1%
Dairy and Frozen 15.8 15.7 15.6
Meats 11.1 11.1 10.6
Non-Foods 9.2 9.2 9.5
Produce 9.4 9.3 9.6
Delicatessen 4.1 4.1 4.1
Seafood 2.0 1.9 1.9
Pharmacy 2.5 2.8 2.9
Bakery 1.6 1.6 1.6
Other .1 .3 .1
100.0% 100.0% 100.0%
Number of superstores 19 18 19
Selling square feet
represented by superstores 82% 82% 88%
</TABLE>
Because of its increased size and broader product mix, a superstore can
satisfy a greater percentage of a customer's weekly shopping needs and, as a
result, the typical superstore generally has a higher volume of sales per square
foot and sales per customer than a conventional supermarket. In addition,
because of their greater total sales volume and increased percentage of their
sales allocable to higher margin items, superstores generally operate more
profitably than conventional supermarkets.
A variety of factors affect the profitability of each of the Company's
stores including local competitors, size, access and parking, lease terms,
management supervision, and the strength of the ShopRite trademark in the local
community. The Company continually evaluates individual stores to decide
whether they should be closed. Accordingly, the Orange, Maplewood, Kingston,
Morristown and Easton stores have been closed since December 1991. In
addition, two stores were converted to a "Village Market" format designed to
reduce costs and increase margins in lower volume locations.
The Company operates a separate liquor store adjacent to one Company
supermarket.
DEVELOPMENT AND EXPANSION
The Company is engaged in a continuing program to upgrade and expand its
supermarket chain. This program has included major store remodelings as well as
the opening or acquisition of additional stores. When remodeling, the Company
has sought, whenever possible, to increase the amount of selling space in its
stores and, where feasible within existing site limitations, to convert
conventional supermarkets to superstores. The Company completed one major
expansion and remodel in fiscal 1995. The Company has budgeted $8,000,000 for
capital expenditures in fiscal 1996. The major planned expenditures are the
expansion and remodel of the Absecon store and the beginning of the expansion of
the Livingston store.
In the last five years, the Company has added one new store and completed
five remodels. The Company's goal has been to open an average of one new
superstore and conduct a major remodel of one store each year. However, because
of delays associated with increased governmental regulations, including sewage
moratoriums and environmental cleanup regulations effecting sites and the lack
of recent activity by real estate developers, the Company has been unable to
open the desired number of new stores. Additional store remodelings and sites
for new stores are in various stages of development. The Company will also
consider additional acquisitions should appropriate opportunities arise.
WAKEFERN
The Company is the second largest member of Wakefern (owning 16.8% of
Wakefern's outstanding stock) and two of the Company's principal shareholders
were founders of Wakefern. Wakefern, which was organized in 1946, is the
nation's largest retailer-owned food cooperative. There are presently 32
individual member companies and 183 supermarkets which comprise the Wakefern
cooperative. Only Wakefern and member companies are entitled to use the
ShopRite name and trademark, purchase their product requirements and
participate in ShopRite advertising and promotional programs and its
computerized purchasing, warehousing and distribution services.
The principal benefits to the Company from its relationship with Wakefern
are the use of the ShopRite name and trademark, volume purchasing, ShopRite
private label products, distribution and warehousing on a cooperative basis, and
ShopRite advertising and promotional programs. The Company believes that the
ShopRite name is widely recognized by its customers and is a factor in those
customers' decisions about where to shop. In addition, Wakefern can purchase
large quantities and varieties of products at favorable prices which it can then
pass on to its members. These benefits are important to the Company's success.
Wakefern distributes as a "patronage dividend" to each of its stockholders
a share of the earnings of Wakefern in proportion to the dollar volume of
business done by the stockholder with Wakefern during each fiscal year.
While Wakefern has a substantial professional staff, it operates as a
member cooperative. Executives of most members make contributions of time to
the business of Wakefern. Senior executives of the Company spend a significant
amount of their time working on various Wakefern committees which oversee and
direct Wakefern purchases and other programs.
Most of the Company's advertising is developed and placed by Wakefern's
professional advertising staff. Wakefern is responsible for all television,
radio and major newspaper advertisements. Wakefern bills its members by various
formulas which distribute advertising costs in accordance with the estimated
proportional benefits to each member from such advertising. The Company also
places Wakefern developed materials with local newspapers.
Wakefern operates warehouses and distribution facilities in Elizabeth, New
Jersey; Dayton, New Jersey; Wallkill, New York; and South Brunswick, New Jersey.
Each member is obligated to purchase from Wakefern a minimum of 85% of its
requirements for products offered by Wakefern until ten years from the date that
stockholders representing 75% of Wakefern sales notify Wakefern that those
stockholders request the Wakefern Stockholder Agreement be terminated. If this
purchase obligation is not met, the member is required to pay Wakefern's profit
contribution shortfall attributable to this failure. This agreement also makes
unapproved changes in control of the Company and sale of the Company or of
individual Company stores, except to a qualified successor, financially
prohibitive by requiring the Company in such cases to pay Wakefern the profit
contribution shortfall attributable to the sale of store or change in control.
Such payments were waived by Wakefern in connection with the sale of the Orange,
Maplewood, Kingston and Morristown stores. A "qualified successor" must be or
agree to become a member of Wakefern and may not own or operate any supermarkets
other than ShopRite supermarkets, in the states of New York, New Jersey,
Pennsylvania, Delaware, Maryland, Virginia, Connecticut, Massachusetts, Rhode
Island, Vermont, New Hampshire, Maine or the District of Columbia or own or
operate more than 25 non-ShopRite supermarkets in any other locations in the
United States.
Wakefern, under circumstances specified in its bylaws, may refuse to sell
merchandise to, and may repurchase the Wakefern stock of, any member. Such
circumstances include certain unapproved transfers by a member of its
supermarket business or its capital stock in Wakefern, unapproved acquisition
by a member of certain supermarket or grocery wholesale supply businesses,
the material breach by a member of any provision of the bylaws of Wakefern or
any agreement with Wakefern or a determination by Wakefern that the continued
supplying of merchandise or services to such member would adversely affect
Wakefern.
Any material change in Wakefern's method of operation or a termination or
material modification of the Company's relationship with Wakefern following
expiration of the above agreements or otherwise (none of which are contemplated
or considered likely) might have an adverse impact on the conduct of the
Company's business and could involve additional expense for the Company. The
failure of any Wakefern member to fulfill its obligations under these agreements
or a member's insolvency or withdrawal from Wakefern could result in increased
costs to remaining members.
Wakefern owns and operates 22 supermarkets. The Company believes that
Wakefern may consider purchasing additional stores in the future from non-
members and from existing members who may desire to sell their stores for
financial, estate planning or other reasons. The Company also understands that
Wakefern may consider opening and operating new ShopRite supermarkets as well.
Wakefern does not prescribe geographical franchise areas to its members.
The specific locations at which the Company, other members of Wakefern or
Wakefern itself may open new units under the ShopRite name are, however,
subject to the approval of Wakefern's Site Development Committee. This
committee is composed of persons who are not employees or members of Wakefern
and from whose decision to deny a site application may be appealed to the
Wakefern Board of Directors. Wakefern assists its members in their site
selection by providing appropriate demographic data, volume projections and
projections of the impact of the proposed market on existing member supermarkets
in the area.
Each member's Wakefern stock (including the Company's) is pledged to
Wakefern to secure all of that member's obligations to Wakefern. Moreover,
every owner of 5% or more of the voting stock of a member (including five
members of the Sumas family) must personally guarantee prompt payment of all
amounts due Wakefern from that member. Wakefern does not own any securities
of the Company or its subsidiaries.
Each of Wakefern's members is required to make capital contributions to
Wakefern based on the number of stores operated by that member (and to a limited
extent the sales volume generated by those stores). As additional stores are
opened or acquired by a member (including the Company), additional capital must
be contributed by it to Wakefern. On occasion, as its business needs have
required, Wakefern has increased the per-store capital contributions required of
its members. Wakefern has in the past permitted these increases in required
capital to be paid in installments over a period of time. The Company is
required to invest approximately $820,000 over approximately the next three
years.
TECHNOLOGY
The Company considers automation and computerization important to its
operations and competitive position. All stores have scanning checkout systems
that improve pricing accuracy, enhance productivity and reduce checkout time for
customers. Over the last several years, the company installed IBM RS/6000
computers and satellite communications in each store. Using the RS/6000 system,
the Company offers customers debit and credit card payment options in all
stores. In addition, the Company is utilizing a computer generated ordering
system in twenty stores, which is designed to reduce inventory levels and out
of stock conditions, enhance shelf space utilization, and reduce labor costs.
The Company's commitment to advanced scanning systems has enabled it to
participate in Price Plus, ShopRite's preferred customer program. Customers
receive electronic discounts by presenting a scannable Price Plus card. In
addition, the Company began using Clip Less coupons in 1994. Customers need
only present their Price Plus card to receive the value of our in-ad coupons.
Also, target marketing programs using this technology are presently being
developed. The Company has converted our customers separate Price Plus and
check cashing cards to a single universal card. In addition to customer
convenience, the new card provides the Company with improved ability to limit
the acceptance of bad checks.
The Company utilizes a direct store delivery system, consisting of personal
computers and hand held scanners, for most items not purchased through Wakefern
in order to provide equivalent cost and retail price control over these
products. In addition, certain in-store department records are computerized,
including the records of all pharmacy departments. In certain stores, meat,
seafood and delicatessen prices are maintained on computer for automatic
weighing and pricing. Furthermore, all stores have computerized time and
attendance systems and most also have computerized energy management systems.
The Company seeks to design its stores to use energy efficiently, including
recycling waste heat generated by refrigeration equipment for heating and other
purposes.
COMPETITION
The supermarket business is highly competitive. Industry profit margins
are narrow, consequently earnings are dependent on high sales volume and
operating efficiency. The Company is in direct competition with national,
regional and local chains as well as independent supermarkets, warehouse clubs,
drug stores, discount department stores and convenience stores. The principal
methods of competition utilized by the Company are low pricing, courteous, quick
service to the customer, quality products and consistent availability of a wide
variety of merchandise including the ShopRite private label. The Company
believes its regional focus and the continuity of its management by the Sumas
family permit it to operate with greater flexibility in tailoring the products
offered in each store to the demographics of the communities they serve as
compared to national and larger regional chains. The Company's principal
competitors are Pathmark, A & P, Foodtown, King's, Grand Union and Acme. Many
of the Company's competitors have financial resources substantially greater
than those of the Company.
LABOR
As of October 6, 1995, the Company employed approximately 3,750 persons,
of whom approximately 2,400 worked part-time. Approximately 86% of the
Company's employees are covered by collective bargaining agreements. The
Company was affected by a labor dispute with its largest union in fiscal 1993
which was settled with a new four year contract. A contract with one union
expires in fiscal 1996. Most of the Company's competitors in New Jersey are
similarly unionized.
REGULATORY ENVIRONMENT
While the Company must secure a variety of health and food distribution
permits for the conduct of its business, it does not believe that such
regulation is material to its operations. The Company's pharmacy departments
are subject to state regulation and licensed pharmacists must be on duty at
all times. The Company's liquor operation is also subject to regulation by
state and municipal administrative authorities. The Company does not
presently anticipate expanding its liquor operations. Compliance with
statutes regulating the discharge of materials into the environment is not
expected to have a material effect on capital expenditures, earnings and
competitive position in fiscal 1996 and 1997.
ITEM 2. PROPERTIES
The Company owns the sites of five of its supermarkets (containing
304,000 square feet of total space), all of which are free-standing stores,
except the Egg Harbor store, which is part of a shopping center. The Company
also owns the site of the former Easton and Maplewood stores. The Maplewood
property is under contract for sale to the current tenant and the Easton store
is currently being marketed. The remaining eighteen supermarkets (containing
800,000 square feet of total space) are leased, with initial lease terms
generally ranging from 20 to 30 years, usually with renewal options. Eleven
of these leased stores are located in strip shopping centers and the remaining
seven are free-standing stores. Except with respect to one lease between the
Company and certain related parties, none of the Company's leases expire
before 1997. The annual rent, including capitalized leases, for all of the
Company's leased facilities for the year ended July 29, 1995 was approximately
$5,700,000. The Company is a limited partner in two partnerships, each of
which owns a shopping center in which one of the Company's leased supermarkets
is located. The Company also is a general partner in a general partnership
that is a lessor of one of the Company's free-standing supermarkets.
ITEM 3. LEGAL PROCEEDINGS
No material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters submitted to shareholders in the fourth quarter.
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
In addition to the information regarding directors incorporated by
reference to the Company's definitive Proxy Statement in Part III, Item 10,
the following is provided with respect to executive officers who are
directors:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
<S> <C> <C>
Carol Lawton 52 Vice President and Assistant Secretary since
1983; responsible for administration of
headquarters staff.
Frank Sauro 37 General Counsel since April 1988.
Mr. Sauro is a member of the New Jersey Bar.
Kevin Begley 37 Chief Financial Officer since December 1988.
Mr. Begley is a Certified Public Accountant.
</TABLE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
The information required by this Item is incorporated by
reference from Information appearing on Page 16 in the Company's
Annual Report to Shareholders for the fiscal year ended July 29,
1995.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by
reference from Information appearing on Page 1 in the Company's
Annual Report to Shareholders for the fiscal year ended July 29,
1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this Item is incorporated by
reference from Information appearing on Pages 4 and 5 in the
Company's Annual Report to Shareholders for the fiscal year ended
July 29, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by
reference from Information appearing on Page 1 and Pages 6 to 16
in the Company's Annual Report to Shareholders for the fiscal
year ended July 29, 1995.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 is incorporated by
reference from the Company's definitive Proxy Statement to be
filed on or before November 3, 1995, in connection with its
Annual Meeting scheduled to be held on December 8, 1995.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated by
reference from the Company's definitive Proxy Statement to be
filed on or before November 3, 1995, in connection with its
Annual Meeting scheduled to be held on December 8, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item 12 is incorporated by
reference from the Company's definitive Proxy Statement to be
filed on or before November 3, 1995, in connection with its
annual meeting scheduled to be held on December 8, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is incorporated by
reference from the Company's definitive Proxy Statement to be
filed on or before November 3, 1995, in connection with its
annual meeting scheduled to be held on December 8, 1995.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) 1. Financial Statements
Consolidated Balance Sheets - July 29, 1995 and July 30, 1994
Consolidated Statements of Operations - years ended
July 29, 1995; July 30, 1994 and July 31, 1993
Consolidated Statements of Shareholders' Equity - years ended
July 29, 1995; July 30, 1994 and July 31, 1993
Consolidated Statements of Cash Flows - years ended
July 29, 1995; July 30, 1994 and July 31, 1993
Notes to consolidated financial statements
The financial statements above and Independent Auditors'
Report have been incorporated by reference from the
Company's Annual Report to Shareholders for the fiscal
year ended July 29, 1995.
2. Financial Statement Schedules
Independent Auditors' Report on Schedules
Schedule V - Property, Equipment and Fixtures
Schedule VI - Accumulated depreciation and
amortization of property, equipment and fixtures
All other schedules are omitted because they are not
applicable, or not required, or because the required
information is included in the consolidated financial
statements or notes thereto.
3. Exhibits
EXHIBIT INDEX
Exhibit No. 3 - Certificate of Incorporation and By-Laws *
Exhibit No. 4 - Instruments defining the rights of security
holders;
4.1 Note Purchase Agreement dated August 20, 1987 *
4.2 Loan Agreement dated March 29, 1994*
4.3 Amendment No. 1 to Loan Agreement*
Exhibit No. 10 - Material Contracts:
10.1 Wakefern By-Laws *
10.2 Stockholders Agreement dated February 20, 1992
between the Company and Wakefern Food Corp. *
10.3 Voting Agreement dated March 4, 1987 *
10.4 1987 Incentive and Nonstatutory Stock Option Plan*
Exhibit No. 13 - Annual Report to Security Holders
Exhibit No. 22 - Subsidiaries of Registrant
Exhibit No. 23 - Consent of KPMG Peat Marwick LLP
Exhibit No. 27 - Article 5 Financial Data Schedule
Exhibit No. 28 a - Press release dated October 3, 1995
Exhibit No. 28 b - Third Quarter Report to Shareholders
* The following exhibits are incorporated by reference from the
following previous filings:
Form 10-K for 1994: 4.3
Form 10-K for 1993: 3, 4.1, 10.1, 10.2, 10.3 and 10.4
Form 10-Q for April 23, 1994: 4.2
(b) No reports on Form 8-K were filed during the fourth quarter
of fiscal 1995.
Independent Auditors' Report on
Financial Statement Schedules
The Board of Directors
Village Super Market, Inc.:
Under date of September 29, 1995, we reported on the
consolidated balance sheets of Village Super Market, Inc. as of
July 29, 1995 and July 30, 1994, and the related consolidated
statements of operations, shareholders' equity, and cash flows
for each of the years in the three-year period ended July 29,
1995 as contained in the 1995 annual report to shareholders.
These consolidated financial statements and our report thereon
are incorporated by reference in the annual report on Form 10-K
for the year 1995. In connection with our audits of the
aforementioned consolidated financial statements, we also have
audited the related financial statement schedules as listed in
the accompanying index. These financial statement schedules are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the
information set forth therein.
KPMG Peat Marwick LLP
Short Hills, New Jersey
September 29, 1995
<TABLE>
VILLAGE SUPER MARKET, INC. AND SUBSIDARIES
SCHEDULE V - PROPERTY, EQUIPMENT AND FIXTURES
<CAPTION>
Col. A Col. B Col C. Col. D Col. E
Balance at Balance
Beginning Additions at end
Classification of Period at Cost Retirements of Period
Fifty-two weeks ended
July 29, 1995
<S> <C> <C> <C> <C>
Land $ 8,028,028 $ -- $ -- $ 8,028,028
Buildings 34,337,623 578,142 38,128 34,877,637
Store fixtures &
equipment 56,895,598 2,503,258 2,228,480 57,170,376
Leasehold
improvements 13,185,705 2,443,054 -- 15,628,759
Leased property
under capital
leases 13,700,599 -- -- 13,700,599
Vehicles 852,096 109,333 180,504 780,925
Construction in
progress 730,496 954,569 -- 1,685,065
$127,730,145 $6,588,356 $2,447,112 $131,871,389
Fifty-two weeks ended
July 30, 1994
Land $ 7,928,028 $ 100,000 $ -- $ 8,028,028
Buildings 34,000,548 337,075 -- 34,337,623
Store fixtures &
equipment 55,024,926 2,978,566 1,107,894 56,895,598
Leasehold
improvements 11,246,225 1,956,927 17,447 13,185,705
Leased property
under capital
leases 15,182,532 -- 1,481,933 13,700,599
Vehicles 883,644 101,910 133,458 852,096
Construction in
progress 231,160 499,336 -- 730,496
$124,497,063 $5,973,814 $2,740,732 $127,730,145
Fifty-three weeks
ended
July 31, 1993
Land $ 7,878,028 $ 50,000 $ -- $ 7,928,028
Buildings 33,899,911 100,637 -- 34,000,548
Store fixtures &
equipment 56,248,734 1,323,522 2,547,330 55,024,926
Leasehold
improvements 11,355,257 146,436 255,468 11,246,225
Leased property
under capital
leases 15,182,532 -- -- 15,182,532
Vehicles 905,669 125,003 147,028 883,644
Construction in
progress -- 231,160 -- 231,160
$125,470,131 $1,976,758 $2,949,826 $124,497,063
</TABLE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, EQUIPMENT AND FIXTURES
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
Balance at Balance
Beginning at end
Classification of Period Additions Retirements of Period
Fifty-two weeks
ended
July 29, 1995
<S> <C> <C> <C> <C>
Buildings $ 6,904,784 $1,174,734 $ 38,128 $ 8,041,390
Store fixtures &
equipment 34,520,815 5,163,170 2,228,480 37,455,505
Leasehold
improvements 7,454,626 1,104,048 -- 8,558,674
Leased property
under capital
leases 6,778,475 526,612 -- 7,305,087
Vehicles 657,527 112,831 175,753 594,605
$56,316,227 $8,081,395 $2,442,361 $61,955,261
Fifty-two weeks
ended
July 30, 1994
Buildings $ 5,733,858 $1,170,926 $ -- $ 6,904,784
Store fixtures &
equipment 30,136,690 5,354,389 970,264 34,520,815
Leasehold
improvements 6,404,256 1,062,824 12,454 7,454,626
Leased property
under capital
leases 7,419,259 544,758 1,185,542 6,778,475
Vehicles 672,133 116,041 130,647 657,527
$50,366,196 $8,248,938 $2,298,907 $56,316,227
Fifty-three weeks
ended
July 31, 1993
Buildings $ 4,558,724 $1,175,134 $ -- $ 5,733,858
Store fixtures &
equipment 26,876,142 5,277,908 2,017,360 30,136,690
Leasehold
improvements 5,682,811 975,136 253,691 6,404,256
Leased property
under capital
leases 6,820,063 599,196 -- 7,419,259
Vehicles 658,907 153,866 140,640 672,133
$44,596,647 $8,181,240 $2,411,691 $50,366,196
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
By: /S/ Kevin Begley By: /S/ Perry Sumas
Kevin Begley Perry Sumas
(Chief Financial & (Chief Executive Officer)
Principal Accounting Officer)
Date: October 25, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on dates indicated:
/S/ Perry Sumas /S/ James Sumas
Perry Sumas, October 25, 1995 James Sumas, October 25, 1995
(Director) (Director)
/S/ Robert Sumas /S/ William Sumas
Robert Sumas, October 25, 1995 William Sumas, October, 25, 1995
(Director) (Director)
/S/ John P. Sumas /S/ John J. McDermott
John P. Sumas, October 25, 1995 John McDermott, October 25, 1995
(Director) (Director)
/S/ George Andresakes /S/ Norman Crystal
George Andresakes, October 25, 1995 Norman Crystal, October 25, 1995
(Director) (Director)
SUBSIDIARIES OF REGISTRANT
The Company currently has one wholly-owned subsidiary, Village
Liquor, Inc. This corporation is organized under the laws of the
State of New Jersey. The Financial statements of this subsidiary are
included in the Company's consolidated financial statements.
Independent Auditors' Consent
The Board of Directors
Village Super Market, Inc.:
We consent to incorporation by reference in the Registration Statement
(No. 2-86320) on Form S-8 of Village Super Market, Inc. of our reports
dated September 29, 1995, relating to the consolidated balance sheets
of Village Super Market, Inc. and subsidiaries as of July 29, 1995 and
July 30, 1994, and the related consolidated statements of operations,
shareholders' equity, and cash flows and related schedules for each of
the years in the three year period ended July 29, 1995, which reports
appear in or are incorporated by reference in the July 29, 1995 annual
report on Form 10-K of Village Super Market, Inc.
Our report refers to a change in the method of accounting for income
taxes.
KPMG Peat Marwick LLP
Short Hills, New Jersey
October 27, 1995
VILLAGE SUPER MARKET, INC. REPORTS RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED JULY 29, 1995
Springfield, N.J. - October 3, 1995 - Village Super Market, Inc.
reported sales and net income for the fourth quarter and year
ended July 29, 1995, Perry Sumas, President announced today.
Net income was $352,000 in the fourth quarter of fiscal 1995
compared to a net loss of $249,000 in the prior year. Fourth
quarter sales were $173,699,000, a decline of 7.5% from the prior
year. Sales decreased due to the current years fourth quarter
containing 13 weeks compared to 14 weeks one year ago and a store
closing one year ago.
In reviewing the quarter, Mr. Sumas attributed the improved
results compared to a year ago to higher gross margins. Operating
expenses as a percentage of sales were the same as a year ago as
decreases in payroll costs were offset by increased supply and
coupon costs. Same store sales increased by .7% in the quarter.
Net income for the full fiscal year was $578,000 compared to a
net loss before the impact of an accounting change of $1,207,000
in the prior year. Sales for the year were $677,322,000 a decline
of 2.6% from the prior year. Sales declined due to a store closed
in August 1994 and a same store sales decrease of .7%. Same
store sales declined due to the impact of new competitive
entries, continued sluggishness in the economy and comparison to
a prior year period that included higher promotional spending.
The improvement in net income in fiscal 1995, despite lower same
store sales is due to higher gross margins, and lower payroll and
coupon costs, partially offset by higher supply costs.
Village Super Market, Inc. operates a chain of twenty-three
supermarkets under the ShopRite name in New Jersey and Eastern
Pennsylvania. The following table summarizes Village's results
for the quarter and year ended July 29, 1995.
<TABLE>
<CAPTION>
July 29, 1995 July 30, 1994
Quarter Ended
<S> <C> <C>
Sales $173,699,000 $187,842,000
Net Income (Loss) $ 352,000 $ (249,000)
Net Income (Loss)
Per Share $ .12 $ (.09)
Year Ended
Sales $677,322,000 $695,070,000
Net Income (Loss) $ 578,000 $ (807,000)
Net Income (Loss)
Per Share $ .20 $ (.28)
</TABLE>
To Our Shareholders:
The Company had a net loss of $293,000 in the third quarter ended
April 29, 1995, a major improvement from the loss of $1,131,000
in the prior year third quarter. For the nine month period, net
income was $227,000 compared to a $958,000 loss before the
cumulative effect of an accounting change in the prior year. The
results for both the quarter and nine month periods are
substantially improved from a year ago, despite lower sales, due
to more efficient use of labor and reduced promotional costs.
Sales in the third quarter decreased 4.3% from the prior year to
$164,453,000. Sales were lower due to the closing of the Easton store
in August 1994. Also, same store sales decreased 1.3% in the third
quarter. Same store sales declined due to the impact of new
competitive entries, continued sluggishness in the economy and
comparison to a prior year period that included higher
promotional spending.
Sales for the nine month period were $503,624,000, a decrease of
.7% from the prior year. Sales decreased due to the store closed
and lower same store sales of 1.1%. This decrease was partially
offset by the current year containing 39 weeks compared to 38
weeks in the prior year.
Gross margins as a percentage of sales for the quarter and nine
month period were 24.6% and 24.4%, respectively, compared with
24.4% in both of the corresponding prior year periods. The
improvement in gross margin percentage in the third quarter was
due to the increased mix of sales in high margin perishable
departments. Price competition in the marketplace and continued
high levels of sale item penetration have prevented further
increases in gross margins throughout fiscal 1995.
Operating and administrative expenses as a percentage of sales
for the quarter and nine periods decreased to 23.0% and 22.4%,
respectively, compared with 23.5% and 22.8%, respectively, in the
corresponding prior year periods. These improvements were due to
lower promotional costs and lower store payroll costs than one
year ago, partially offset by higher supply costs.
The Company completed expansions and remodels of the Stirling,
Hillsborough and Chester stores this year. An expansion of the
Absecon store has begun. The following table summarizes
Village's results for the quarter and nine month periods ended
April 29, 1995.
Respectfully,
Perry Sumas, President James Sumas, Chairman of the Board
June 9, 1995
<TABLE>
INCOME STATEMENT DATA
<CAPTION>
April 29, 1995 April 23, 1994
13 Weeks Ended
<S> <C> <C>
Sales $164,453,000 $171,776,000
Net Income (Loss) $ ( 293,000) $ (1,131,000)
Net Income (Loss)
Per Share $ (.10) $ (.39)
39 Weeks Ended 38 Weeks Ended
Sales $503,624,000 $507,228,000
Income (Loss) Before
Accounting Change $ 227,000 $ (958,000)
Cumulative Effect of
Accounting Change $ --- $ 400,000
Net Income (Loss) $ 227,000 $ (558,000)
Net Income (Loss)
Per Share:
Income (Loss) Before
Accounting Change $ .08 $ (.33)
Cumulative Effect of
Accounting Change $ --- $ .14
Net Income (Loss) $ .08 $ (.19)
</TABLE>
<TABLE>
BALANCE SHEET COMPARISONS
<CAPTION>
April 29, 1995 July 30, 1994
<S> <C> <C>
Current Assets $ 38,940,000 $ 38,141,000
Current Liabilities 40,402,000 42,241,000
Net Working Capital (Deficit) (1,462,000) (4,100,000)
Long Term Debt 39,033,000 36,933,000
Stockholders' Equity 52,650,000 52,423,000
</TABLE>
Village Super Market, Inc. and Subsidiaries
The Company
Village Super Market, Inc. operates a chain of 23 ShopRite supermarkets,
17 of which are located in northern New Jersey, 1 in northeastern Pennsylvania
and 5 in the southern shore area of New Jersey.
Village is a member of Wakefern Food Corporation, the largest retailer owned
food cooperative in the United States.
Village's business was founded in 1937 by Nicholas and Perry Sumas and has
continued to be principally owned and operated under the active management of
the Sumas family.
Contents
Letter to Shareholders................................................2
Management's Discussion and Analysis of
Financial Condition and Results of Operations........................4
Financial Statements..................................................6
Independent Auditors' Report.........................................16
Stock Price and Dividend Information.................................16
Corporate Directory...................................INSIDE BACK COVER
Village Super Market, Inc. and Subsidiaries
<TABLE>
Selected Financial Data
(Dollars in thousands except per share and per sq. ft. data)
<CAPTION>
JULY 29, JULY 30, JULY 31, JULY 25, JULY 27,
1995 1994 1993 1992 1991
FOR YEAR
<S> <C> <C> <C> <C> <C>
Sales $677,322 $695,070 $713,856 $715,059 $686,002
Net income
(loss) 578 (807) 1,437 487 1,908
Net income
(loss) per share .20 (.28) .49 .17 .64
Cash dividends
per share
Class A -- -- -- .075 .15
Class B -- -- -- .05 .10
AT YEAR END
Total assets 135,575 134,793 141,387 145,668 141,847
Long term
obligations
including capital
leases 34,853 36,933 39,470 45,699 40,328
Working capital
(deficit) (3,755) (4,100) (2,303) (3,617) (2,651)
Shareholders'
equity 53,001 52,423 53,230 51,793 51,485
Book value
per share 18.21 18.01 18.29 17.80 17.69
OTHER DATA
Selling sq ft 842,000 845,000 874,000 930,000 881,000
Number of stores 23 24 25 27 27
Sales per average
number of stores 29,449 28,370 27,456 26,484 25,407
Sales per average
sq ft of
selling space 803 809 791 790 814
Capital
expenditures 6,588 5,974 1,977 14,494 18,963
</TABLE>
<TABLE>
Unaudited Quarterly Financial Data
(Dollars in thousands except per share amounts)
<CAPTION>
FIRST SECOND THIRD FOURTH FISCAL
QUARTER QUARTER QUARTER QUARTER YEAR
1995
<S> <C> <C> <C> <C> <C>
SALES $167,366 $171,804 $164,453 $173,699 $677,322
GROSS MARGIN 40,626 41,840 40,494 42,911 165,871
NET INCOME (LOSS) 83 436 (293) 352 578
NET INCOME (LOSS)
PER SHARE $ .03 $ .15 $ (.10) $ .12 $ .20
1994
Sales $158,745 $176,707 $171,776 $187,842 $695,070
Gross margin 38,940 42,897 41,846 45,404 169,087
Income (loss)
before cumulative
effect of accounting
change 16 157 (1,131) (249) (1,207)
Income (loss)
per share before
cumulative effect
of accounting change -- $ .06 $ (.39) $ (.09) $ (.42)
Net income (loss) 416 157 (1,131) (249) (807)
Net income (loss)
per share $ .14 $ .06 $ (.39) $ (.09) $ (.28)
</TABLE>
Village Super Market, Inc. and Subsidiaries
Dear Fellow Shareholders
We are pleased to report net income of $578,000, or $.20 per share, in
fiscal 1995. This compares with a net loss before an accounting change of
$1,207,000 in 1994. Sales decreased 2.6% to $677,322,000 due to the closing of
the Easton store and a same store sales decline of .7%.
A year ago we expressed how disappointed we were with the 1994
results and explained the corrective actions we were taking. Happily, we
achieved the expense reductions we expected. Payroll costs declined due to
more efficient use of hours worked and promotional costs were also reduced.
These improvements and an increase in gross margins resulted in the
turnaround in 1995, despite lower same store sales.
Our marketing areas continue to experience increased competition.
During 1995 four competitors opened stores in markets we serve. We expect
this trend to continue, resulting in limited improvement in same store sales.
Our focus will remain on updating our store base, reducing our cost structure
and satisfying our customers' needs.
We completed an expansion of the Chester store this year. The Chester
store and the three stores remodeled in 1994 are meeting our performance
expectations. We recently began a major expansion of the Absecon store. The
Livingston store is scheduled for a major remodel next spring. We also
continue to pursue approval of a new store in Garwood/Westfield.
As part of ShopRite's continuing commitment to customer satisfaction,
comprehensive consumer marketing surveys were performed this year by a
consultant. The information obtained from these surveys has been used to
improve training programs and to enhance employees' and management's
understanding of customer needs and priorities.
Customer needs and thus the supermarket have continued to change over
the years. With the prevalence of two-income families and the struggle to
find enough time in the day, we have responded by increasing our offerings of
foods to go and packaged salads. We expect these and similar responses to
changing customer needs to be growth areas.
We thank our employees for their hard work in restoring profitability
after a difficult year and our shareholders for their patience and support.
James Sumas, Perry Sumas,
Chairman of the Board President
Village Super Market, Inc. and Subsidiaries
Nicholas J. Sumas
1903 - 1995
Village Supermarket lost its co-founder, Nicholas Sumas, this year.
Mr. Nick, as he was known to members of the Village family, served as Chairman
of the Board from its incorporation until 1989. He also served as President and
CEO until 1973.
Nick emigrated to the United States in 1920 from Vithos, Greece. In 1937,
with his brother Perry, he opened a small produce market that later became the
first Village Super Market in South Orange, New Jersey. A decade later they
joined several other small food markets to form the ShopRite food cooperative,
Wakefern Food Corporation. Nick served as President of Wakefern in 1954 and
1955.
Throughout his life Nick supported his church and community with the
same dedication and enthusiasm that he devoted to the company he founded. He
served as President of St. Constantine and Helen Church in Orange from 1956 to
1966. Nick created the Sumas Foundation, which funded a library for the
children of St. Basils Academy in Garrison, NY. His leadership and guidance
will be sorely missed by all of us at Village.
Village Super Market, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
The following table sets forth the major components of the Consolidated
Statements of Operations of the Company as a percentage of sales:
<TABLE>
<CAPTION>
JULY 29, July 30, July 31,
1995 1994 1993
<S> <C> <C> <C>
Sales 100.00% 100.00% 100.00%
Cost of sales 75.51 75.67 75.80
Gross margin 24.49 24.33 24.20
Operating and
administrative expense 22.44 22.73 22.27
Depreciation and
amortization 1.28 1.26 1.22
Operating income .77 .34 .71
Interest (net) .60 .57 .62
Gain (loss) on disposal
of assets (.04) (.05) .24
Income (loss) before taxes
and cumulative effect of
accounting change .13% (.28)% .33%
</TABLE>
Sales decreased $17,748,000 in fiscal 1995. The closing of the Easton
store in August 1994 decreased sales by $11,600,000. In addition, same store
sales decreased by .7% due to the effects of new competitive entries,
continued sluggishness in the economy and comparison to a prior year period
that included higher promotional spending. Sales decreased $18,786,000 in
fiscal 1994. Sales decreased $13,100,000 as a result of the prior year
containing 53 weeks. The sale of the Morristown and Kingston stores caused
decreased sales of $13,900,000. Offsetting these declines was a same store
sales increase of 1.3%. Although same store sales increased in the
middle part of the fiscal year due to increased promotional spending,
the sluggish economy and new competitive entries held same store sales
flat in the fourth quarter.
Gross margin as a percentage of sales increased in fiscal 1995
and 1994 as a result of aggressive buying practices. High levels of sale
item penetration and price competition in the marketplace prevented further
increases in gross margins.
Operating and administrative expenses in fiscal 1995 declined
by .3 as a percentage of sales. This improvement was due to lower payroll
and coupon costs, partially offset by increased supply costs. Payroll
costs declined, despite an increase in pay rate per hour, due to a
reduction in same store hours worked. Operating and administrative expenses
in fiscal 1994 were slightly lower due to store closings and one less week
of operations but increased .46 as a percentage of sales. Approximately
half of this increase was due to higher levels of promotional spending,
chiefly coupons, in the middle part of the year. Although this additional
promotional spending was partially responsible for the increase in same
store sales, a larger sales increase was expected in order to offset the
cost of these coupons. In addition, workers' compensation, health care
and payroll costs increased.
Interest expense increased in 1995 due to higher variable interest
rates. Interest expense decreased in 1994 due to declining debt levels and
lower interest rates.
Net income was $578,000 in fiscal 1995 compared to a net loss before
the cumulative effect of accounting change of $1,207,000 in fiscal 1994.
This improvement is primarily attributable to reductions in payroll and
coupon costs and improved gross margins.
The Easton store was closed on August 30, 1994. The Company is
pursuing selling or leasing this company owned property. A charge to
operations in the amount of $200,000 is included in the 1995 results from
the closing of the store. The equipment and leasehold of the Morristown
store was sold on October 6, 1993 for $87,000 plus the cost of inventory.
A loss of $354,000 was recorded in fiscal 1994 and an additional loss of
$300,000 was recorded in fiscal 1995 for additional rent and disposal costs
that were incurred as a result of the sublessee's failure to make rent
payments.
Village Super Market, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Sales were not materially affected by inflation in 1995 and 1994.
The Company has historically been able to pass along inflationary increases
in its direct product costs through increased selling prices. However,
operating and administrative costs have increased in some recent years
despite the lack of inflation in food prices. The competitive climate has
at times prevented the Company from increasing gross margins to compensate
for increased operating costs. As a result, the Company had experienced
declining profitability prior to 1995. A continuation of the recent trend
of increased price competition, higher wage and benefit costs and a sluggish
economy could prevent the Company from increasing its operating margins and
profitability.
LIQUIDITY AND CAPITAL RESOURCES
Current liabilities exceeded current assets by $3,755,000, $4,100,000
and $2,303,000 at the end of fiscal 1995, 1994, and 1993, respectively.
Working capital ratios at the same dates were .91, .90 and .95 to one,
respectively. The Company's working capital needs are reduced by its high rate
of inventory turnover (twenty-one times in fiscal 1995) and because the
warehousing and distribution arrangements accorded to the Company as a member
of Wakefern permit it to minimize inventory levels and sell most merchandise
before payment is required. The Starn's stores generate greater sales during
the summer months due to their location in the southern shore region of New
Jersey. This seasonality serves to offset the slight decline in sales
experienced during the summer months by the majority of the Company's other
stores, resulting in a more level distribution of working capital require-
ments throughout the year.
Capital expenditures in 1995 were $6,588,000. The major expenditure
was the expansion and remodeling of the Chester store. The remainder of
capital expenditures included the start of the expansion of the Absecon store
and amounts expended in an effort to obtain approvals for a new store. The
Company has budgeted approximately $8,000,000 for capital expenditures in
fiscal 1996. The major planned expenditures are the expansion and remodeling
of the Absecon store and the beginning of the expansion of the Livingston
store. The Company expects to finance these expenditures through internally
generated funds and borrowing under its credit facility.
The Company has historically financed capital expenditures through
cash provided by operations supplemented by bank borrowings. Aggregate
capital expenditures for the three years ended July 29, 1995 were $14,539,000.
During the same period of time, net long-term borrowings decreased by
$10,075,000. The ability to finance expansion through operational cash flow
is reflected in the ratio of long-term debt to total capitalization, which
is currently 39.7% compared with 46.8% three years ago.
In addition to operating cash flow, the Company's primary source of
liquidity during 1996 is expected to be borrowings under the $12,000,000
revolving loan credit facility. At July 29, 1995, the Company had borrowed
$7,000,000 under this facility. The Company was in full compliance with all
terms and restrictive covenants of this debt agreement, as amended, during
fiscal 1995 and expects to be in compliance for the remaining term of the
agreement.
At July 29, 1995, the Company did not meet a cash flow-to-fixed
charge coverage ratio contained in two other debt agreements with one 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.
Village Super Market, Inc. and Subsidiaries
<TABLE>
Consolidated Balance Sheets
<CAPTION>
JULY 29, JULY 30,
1995 1994
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 9,655,284 $ 7,246,164
Merchandise inventories 24,179,034 25,273,150
Patronage dividend receivable 2,682,880 2,782,470
Miscellaneous receivables 2,677,519 1,902,370
Income taxes receivable 459,873 356,814
Prepaid expenses 629,639 580,124
Total current assets 40,284,229 38,141,092
PROPERTY, EQUIPMENT AND FIXTURES,
at cost less accumulated depreciation
and amortization 69,916,128 71,413,918
OTHER ASSETS
Investment in related party, at cost 9,819,818 9,415,874
Goodwill, net 10,871,452 11,137,730
Other intangibles, net 2,791,250 3,045,001
Receivables and other assets 1,891,680 1,639,152
Total other assets 25,374,200 25,237,757
$135,574,557 $134,792,767
</TABLE>
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
CURRENT LIABILITIES
<S> <C> <C>
Current portion of long-term debt:
Mortgages and notes payable $ 4,711,734 $ 4,764,650
Capitalized lease obligations 368,675 383,926
Accounts payable to related party 25,583,821 23,947,383
Accounts payable and accrued
expenses 12,602,904 12,330,181
Deferred income taxes 771,948 814,737
Total current liabilities 44,039,082 42,240,877
LONG-TERM DEBT, less current portion:
Mortgages and notes payable 24,608,961 26,320,696
Capitalized lease obligations 10,243,557 10,612,232
Total long-term debt 34,852,518 36,932,928
DEFERRED INCOME TAXES 3,681,883 3,195,595
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, no par value:
Authorized 10,000,000 shares,
none issued -- --
Class A common stock, no par value:
Authorized 10,000,000 shares,
issued 1,762,800 shares 18,129,472 18,129,472
Class B common stock, no par value:
Authorized 10,000,000 shares,
issued and outstanding
1,594,076 shares 1,034,679 1,034,679
Retained earnings 40,021,926 39,444,219
Less treasury stock,
Class A, at cost (447,000 shares) (6,185,003) (6,185,003)
Total shareholders' equity 53,001,074 52,423,367
$135,574,557 $134,792,767
</TABLE>
See notes to consolidated financial statements.
Village Super Market, Inc. and Subsidiaries
<TABLE>
Consolidated Statements of Operations
<CAPTION>
YEARS ENDED
JULY 29, JULY 30, JULY 31,
1995 1994 1993
<S> <C> <C> <C>
SALES $677,321,821 $695,070,272 $713,856,206
COST OF SALES 511,451,057 525,983,044 541,120,690
GROSS MARGIN 165,870,764 169,087,228 172,735,516
Operating and
administrative expense 152,008,710 157,983,230 158,943,214
Depreciation and
amortization expense 8,618,374 8,785,917 8,718,220
Operating Income 5,243,680 2,318,081 5,074,082
Interest expense, net of
interest income of $58,488,
$103,126 and $27,459 4,030,535 3,900,248 4,404,606
Gain (loss) on disposal
of assets (300,438) (354,523) 1,696,174
INCOME (Loss) BEFORE INCOME
TAXES AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 912,707 (1,936,690) 2,365,650
PROVISION (BENEFIT) FOR
INCOME TAXES 335,000 (730,000) 929,000
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 577,707 (1,206,690) 1,436,650
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES -- 400,000 --
NET INCOME (LOSS) $ 577,707 $ (806,690) $ 1,436,650
NET INCOME (LOSS) PER SHARE:
INCOME (LOSS) BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ .20 $ (.42) $ .49
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE -- .14 --
NET INCOME (LOSS) $ .20 $ (.28) $ .49
</TABLE>
See notes to consolidated financial statements.
Village Super Market, Inc. and Subsidiaries
<TABLE>
Consolidated Statements of Shareholders' Equity
<CAPTION>
YEARS ENDED JULY 29, 1995
JULY 30, 1994 AND JULY 31, 1993
NO PAR VALUE NO PAR VALUE
CLASS A, CLASS B,
COMMON STOCK COMMON STOCK
RETAINED TREASURY
SHARES AMOUNT SHARES AMOUNT EARNINGS STOCK
<S> <C> <C> <C> <C> <C> <C>
Balance,
July 25,
1992 1,758,800 $18,126,876 1,598,076 $1,037,275 $38,814,259 $(6,185,003)
Net
Income -- -- -- -- 1,436,650 --
Balance,
July 31,
1993 1,758,800 $18,126,876 1,598,076 $1,037,275 $40,250,909 $(6,185,003)
Net Loss -- -- -- -- (806,690) --
Conversion
of shares 4,000 2,596 (4,000) (2,596) -- --
Balance,
July 30,
1994 1,762,800 $18,129,472 1,594,076 $1,034,679 $39,444,219 $(6,185,003)
NET INCOME -- -- -- -- 577,707 --
BALANCE,
JULY 29,
1995 1,762,800 $18,129,472 1,594,076 $1,034,679 $40,021,926 $(6,185,003)
</TABLE>
See notes to consolidated financial statements.
Village Super Market, Inc. and Subsidiaries
<TABLE>
Consolidated Statements of Cash Flows
<CAPTION>
YEARS ENDED
JULY 29, 1995 JULY 30, 1994 JULY 31, 1993
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ 577,707 $(806,690) $1,436,650
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Cumulative effect of
accounting change -- (400,000) --
Depreciation and amortization 8,618,374 8,785,917 8,718,220
Deferred taxes (71,000) (911,000) (138,000)
Provision to value inventories
at LIFO 344,878 656,346 212,380
(Gain) loss on disposal of
assets 300,438 354,523 (1,696,174)
Changes in assets and liabilities:
Decrease in merchandise
inventories 749,238 316,394 252,033
(Increase) decrease in patronage
dividend receivable 99,590 167,793 (29,710)
(Increase) decrease in
miscellaneous receivables (775,149) 2,339,377 (601,755)
(Increase) in prepaid expenses (49,515) (11,109) (118,037)
(Increase) decrease in income
taxes receivable 411,440 253,458 (610,272)
(Increase) decrease in other
assets (269,478) 606,376 (265,924)
Increase (decrease) in accounts
payable to related party 1,636,438 546,851 (288,519)
Increase (decrease) in accounts
payable and accrued expenses 272,723 (2,191,982) 308,445
(Decrease) in income taxes
payable -- (264,394) (239,920)
Net cash provided by operating
activities 11,845,684 9,441,860 6,939,417
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (6,588,356) (5,973,814) (1,976,758)
Investment in related party (403,944) (361,328) (542,403)
Proceeds (expenditures) from
disposal of assets (295,687) 87,303 2,234,309
Net cash used in investing
activities (7,287,987) (6,247,839) (284,852)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of
long-term debt 3,000,000 14,000,000 --
Principal payments of
long-term debt (5,148,577) (16,567,312) (5,359,109)
Net cash used in financing
activities (2,148,577) (2,567,312) (5,359,109)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 2,409,120 626,709 1,295,456
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 7,246,164 6,619,455 5,323,999
CASH AND CASH EQUIVALENTS,
END OF YEAR $9,655,284 $7,246,164 $6,619,455
</TABLE>
See notes to consolidated financial statements.
Village Super Market, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Village
Super Market, Inc. and its subsidiary, which is wholly owned. Intercompany
balances and transactions have been eliminated.
FISCAL YEAR
The Company and its subsidiaries utilize a 52-53 week fiscal year ending
on the last Saturday in the month of July. Fiscal 1995 and 1994 contain 52
weeks. Fiscal 1993 contained 53 weeks.
INDUSTRY SEGMENT
The Company consists of one operating segment, the retail sale of food
and non-food products.
RECLASSIFICATIONS
Certain amounts have been reclassified in the 1994 and 1993 financial
statements to conform to the 1995 financial statement presentation.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes interest bearing, overnight deposits
with Wakefern in the amount of $6,900,000 and $5,200,000 at July 29, 1995
and July 30, 1994, respectively.
MERCHANDISE INVENTORIES
Merchandise inventories are carried at cost, which is not in excess of
market. Cost is determined as follows:
Grocery and non-foods - last-in, first-out (LIFO) (retail less
departmental gross profit mark-up).
Meat and all other perishables - first-in, first-out (FIFO).
Dairy, frozen foods and liquor - FIFO (retail less departmental gross
profit mark-up).
PROPERTY, EQUIPMENT AND FIXTURES
Property, equipment and fixtures are recorded at cost. Interest cost
incurred to finance construction is capitalized as part of such cost.
Renewals and betterments are capitalized. Maintenance and repairs are
expensed as incurred.
Depreciation is provided on a straight-line basis over estimated useful
lives of thirty years for buildings, ten years for store fixtures and
equipment, and three years for vehicles. Leasehold improvements are
amortized over ten to twenty years. Capital leases are amortized on a
straight-line basis over the shorter of the related lease term or the
economic lives of the related assets.
When assets are sold or retired, their cost and accumulated depreciation
are removed from the accounts, and any gain or loss is reflected in the
financial statements.
STORE OPENING AND CLOSING COSTS
All store opening costs are expensed as incurred. Provisions are made for
losses resulting from store closings at the time of closing.
LEASES
Leases which meet certain criteria are classified as capital leases, and
assets and liabilities are recorded at amounts equal to the lesser of the
present value of the minimum lease payments or the fair value of the leased
properties at the inception of the respective leases. Such assets are
amortized on a straight-line basis over the shorter of the related lease
terms or the economic lives of the related assets. Amounts representing
interest expense relating to the lease obligations are recorded to affect
constant rates of interest over the terms of the leases. Leases which do
not qualify as capital leases are classified as operating leases, and
related rentals are charged to expense as incurred.
GOODWILL
Goodwill arising after October 31, 1970 is being amortized over forty
years. The Company does not amortize goodwill amounting to approximately
$2,900,000 acquired prior to October 31, 1970 since, in management's opinion,
the value of such intangibles has not diminished. Accumulated amortization
of goodwill amounted to $2,540,530 and $2,274,250 at July 29, 1995 and
July 30, 1994, respectively. The Company regularly assesses the
recoverability of unamortized amounts of goodwill utilizing relevant cash
flow and profitability information.
OTHER INTANGIBLES
Other intangibles include the fair value of a favorable lease and
trademarks acquired in a business acquisition. Other intangibles are being
amortized over 20 years. Accumulated amortization of other intangibles
amounted to $2,283,749 and $2,029,999 at July 29, 1995 and July 30, 1994,
respectively.
INCOME TAXES
Effective August 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), which
requires an asset and liability approach for 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 tax rates in effect. As permitted by
SFAS 109, the Company has elected not to restate the financial statements of
any prior periods.
Village Super Market, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed by dividing net income (loss) by
the weighted average number of all common shares outstanding during the
periods presented which was 2,909,876 in 1995, 1994 and 1993. Stock options
are not included in the calculation as their inclusion would be anti-dilutive
or would not result in a material dilution of net income (loss) per share.
NOTE 2 - INVENTORIES
Merchandise inventories are comprised as follows:
<TABLE>
<CAPTION>
JULY 29, JULY 30,
1995 1994
<S> <C> <C>
Last-in, first-out (LIFO) $15,947,436 $17,084,096
First-in, first-out (FIFO) 8,231,598 8,189,054
$24,179,034 $25,273,150
</TABLE>
If the FIFO method of inventory accounting had been used rather than LIFO,
inventories would have been $6,812,530 and $6,467,653 higher than reported
in 1995 and 1994, respectively.
NOTE 3 - PROPERTY, EQUIPMENT AND FIXTURES
Property, equipment and fixtures are comprised as follows:
<TABLE>
<CAPTION>
JULY 29, JULY 30,
1995 1994
<S> <C> <C>
Land and buildings $42,905,665 $42,365,651
Store fixtures and equipment 57,170,376 56,895,598
Leasehold improvements 15,628,759 13,185,705
Leased property under capital
leases 13,700,599 13,700,599
Vehicles 780,925 852,096
Construction in progress 1,685,065 730,496
131,871,389 127,730,145
Less accumulated depreciation
and amortization 61,955,261 56,316,227
Property, equipment and
fixtures - net $69,916,128 $71,413,918
</TABLE>
NOTE 4 - RELATED PARTY INFORMATION
The Company's investment in its principal supplier, Wakefern Food Corp.
("Wakefern"), which is operated on a cooperative basis for its stockholder
members, is less than 20% of the outstanding shares of Wakefern. The
investment is pledged as collateral for any obligations to Wakefern. In
addition, this obligation is personally guaranteed by the principal
shareholders of the Company. The Company is obligated to purchase 85% of
its primary merchandise requirements from Wakefern until ten years from the
date that stockholders representing 75% of Wakefern sales notify Wakefern
that those stockholders request the Wakefern Stockholder Agreement be
terminated. The Company's merchandise purchases from Wakefern approximated
$484,491,000, $490,447,000 and $489,658,000 during fiscal years 1995, 1994
and 1993, respectively. Wakefern distributes as a "patronage dividend" to
each member a share of earnings of Wakefern in proportion to the dollar
volume of business done by the member with Wakefern during the year.
Patronage dividends, which are recorded as a reduction of cost of sales,
amounted to $8,223,000, $7,702,000 and $6,897,000 in 1995, 1994 and 1993,
respectively.
Village Super Market, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
NOTE 4 - RELATED PARTY INFORMATION (continued)
Wakefern has increased from time to time the required investment in its
common stock for each supermarket owned by a member, with the exact amount
per store computed in accordance with a formula based on the volume of each
store's purchases from Wakefern. As a result, the Company is required to
invest approximately $820,000 over approximately the next three years. The
Company will receive additional shares of common stock to the extent paid
for at the end of each fiscal year (September 30) of Wakefern calculated at
the then book value of such shares. The payments together with any stock
issued thereunder, at the option of Wakefern, may be null and void and all
payments on this subscription shall become the property of Wakefern in the
event the Company does not complete the payment of this subscription in a
timely manner.
NOTE 5 - MORTGAGES AND NOTES PAYABLE
<TABLE>
<CAPTION>
JULY 29, JULY 30,
1995 1994
<S> <C> <C>
Term loans, interest at 8.49% payable
monthly, principal payable in monthly
installments of $55,555 with a final
principal payment of $5,555,556 due
April 1, 2001 $9,333,333 $10,000,000
Revolving credit note 7,000,000 4,000,000
Senior unsecured notes, interest at
9.91% payable quarterly, due in annual
installments through August 15, 1997 5,600,000 8,100,000
Mortgage note, interest at 10.19% payable
semi-annually, due in three equal annual
installments beginning December 1, 1997,
collateralized by certain land and
building 4,000,000 4,000,000
Notes payable, interest at prime minus
1.5%, payable in monthly installments
through January 1998, collateralized by
certain equipment 3,387,362 4,932,430
Other notes payable -- 52,916
29,320,695 31,085,346
Less current portion 4,711,734 4,764,650
Noncurrent maturities $24,608,961 $26,320,696
</TABLE>
Aggregate principal maturities of mortgages and notes as of July 29, 1995
are as follows:
<TABLE>
<CAPTION>
Year ending July:
<S> <C>
1996 $ 4,711,734
1997 11,670,067
1998 2,938,894
1999 2,000,000
2000 2,000,000
</TABLE>
On March 29, 1994 the Company entered into a new loan agreement with two
banks. The agreement consists of a $10,000,000 term loan and a $12,000,000
revolving loan. The $12,000,000 revolving loan, which can be used for any
purpose except new store construction, matures March 31, 1997 and carries
interest at prime plus .5 %.
At July 29, 1995 the Company was in compliance with all terms and
restrictive covenants of this debt agreement, as amended. This agreement
contains restrictive covenants which, among other matters, specify total
debt levels, maintenance of net worth, interest coverage ratios, cash flow
coverage ratios, limitation on payment of dividends and limitation of capital
expenditures.
At July 29, 1995 the Company did not meet a cash flow-to-fixed charge
coverage ratio contained in two other debt agreements with one 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 under the Company's revolving loan), declaring
dividends and executing new leases.
Interest paid amounted to $4,073,646, $4,095,616 and $4,496,835 in 1995,
1994 and 1993, respectively.
Village Super Market, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
NOTE 6 - INCOME TAXES
The components of the provision (benefit) for income taxes are:
<TABLE>
<CAPTION>
1995 1994 1993
Federal:
<S> <C> <C> <C>
Current $175,000 $ 181,000 $733,000
Deferred 69,000 (787,000) (89,000)
State:
Current 231,000 -- 334,000
Deferred (140,000) (124,000) (49,000)
$335,000 $(730,000) $929,000
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets are as
follows:
<TABLE>
<CAPTION>
JULY 29, JULY 30,
1995 1994
Deferred tax liabilities:
<S> <C> <C>
Tax over book depreciation $5,794,712 $5,978,030
Patronage dividend receivable 1,071,542 1,118,205
Other 573,616 365,064
Total deferred tax liabilties 7,439,870 7,461,299
Deferred tax assets:
Amoritization of capital leases 1,684,158 1,637,252
Tax credits and loss carry forwards 858,503 1,381,647
Other 443,378 432,068
Total deferred tax assets 2,986,039 3,450,967
Net deferred tax liability $4,453,831 $4,010,332
</TABLE>
A valuation allowance is provided when it is more likely than not that
some portion of the deferred tax assets will not be realized. In management's
opinion, in view of the Company's previous, current and projected taxable
income, such tax assets will more likely than not be fully realized.
Accordingly, no valuation allowance was deemed to be required at July 29,
1995 and July 30, 1994.
The effective income tax rate differs from the statutory federal income
tax rate as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Statutory federal income tax rate 34.0% (34.0%) 34.0%
Targeted jobs tax credit (14.5) (4.2) (7.0)
Amortization of intangibles 10.6 4.7 4.4
State income taxes, net of
federal tax benefit 6.6 (4.2) 7.9
Effective income tax rate 36.7% (37.7%) 39.3%
</TABLE>
During 1993 deferred income taxes were provided for significant timing
differences in the recognition of expenses for tax and financial statement
purposes. The principal components of deferred tax expense (benefit) in 1993
are depreciation - $(354,000) and accrued liabilities - $128,000.
The Company has approximately $500,000 of alternative minimum tax credits
that may be carried forward indefinitely. The Company has approximately
$400,000 of targeted jobs tax credits that can be carried forward fifteen
years.
No income taxes were paid in 1995. Income taxes paid amounted to
approximately $192,000 and $1,917,000 in 1994 and 1993, respectively.
Village Super Market, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
NOTE 7 - LONG-TERM LEASES
DESCRIPTION OF LEASING ARRANGEMENTS
The Company conducts a major part of its operations from leased facilities,
with the majority of initial lease terms ranging from 20 to 30 years. All of
the Company's leases expire through fiscal 2059.
Most of the Company's leases contain renewal options of five years each.
These options enable the Company to retain the use of facilities in desirable
operating areas. Management expects that in the normal course of business,
leases will be renewed or replaced by other leases. The Company is obligated
under all leases to pay for utilities and liability insurance, and under
certain leases to pay additional amounts based on real estate taxes,
maintenance, insurance and a percentage of sales in excess of stipulated
amounts.
Future minimum lease payments by year and in the aggregate for all
non-cancelable leases with initial terms of one year or more consisted of the
following at July 29, 1995:
<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
<S> <C> <C>
1996 $ 1,953,229 $ 3,073,879
1997 1,918,476 3,053,808
1998 1,924,186 2,923,158
1999 1,932,180 2,925,246
2000 1,943,595 2,927,352
Thereafter 18,317,048 17,095,055
Minimum lease payments 27,988,714 $31,998,498
Less amount representing
interest 17,376,482
Present value of minimum
lease payments $10,612,232
</TABLE>
The following schedule shows the composition of total rental expense
under operating leases for the following periods:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Minimum rents $3,138,751 $3,353,487 $3,149,108
Contingent rentals 533,774 750,728 892,112
Less sub-lease rentals -- -- (80,880)
$3,672,525 $4,104,215 $3,960,340
</TABLE>
RELATED PARTY LEASES
The Company currently leases three supermarkets and its office facility
from realty firms partly or wholly-owned by officers of the Company. The
Company paid aggregate rentals under these leases, including minimum rent
and contingent rent, of approximately $1,128,000, $1,215,000 and $1,039,000
for fiscal years 1995, 1994 and 1993, respectively. In addition, three
supermarkets are leased from partnerships in which the Company is a partner.
NOTE 8 - COMMON STOCK
Class A common stock has one vote per share and is entitled to cash
dividends as declared 54% greater than those paid on the Class B common
stock. Class B common stock has ten votes per share. Class B common stock
is not transferrable except to another holder of Class B common stock or
by will or under the laws of intestacy or pursuant to a resolution of the
Board of Directors of the Company approving the transfer. Shares of Class B
common stock are convertible on a share-for-share basis for Class A common
stock.
The Company has an Incentive and Nonstatutory Stock Option Plan under
which both incentive and nonstatutory options to purchase up to 150,000
shares of the Company's Class A common stock may be granted to officers
and employees of the Company as designated by the Board of Directors. The
plan requires incentive stock options to be granted at an exercise price
equalling the fair market value of the Company's stock at the date of grant
(110% if the optionee holds more than 10% of the voting stock of the Company),
while nonstatutory options may be granted at an exercise price less than
market value. All options granted to date are at an exercise price equal to
the fair value at the date of grant. All options outstanding at July 29, 1995
expire on December 6, 1997. There were no transactions in fiscal 1995, 1994
and 1993. There are 130,000 options outstanding and exercisable at an average
price of $8.00 at July 29, 1995.
Village Super Market, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
NOTE 9 - PENSION PLANS
The Company sponsors three defined benefit pension plans covering
administrative personnel and members of two unions. Employees covered under
the administrative pension benefit plan earn benefits based upon percentages
of annual compensation. Employees covered under the union pension benefit
plans earn benefits based on a fixed amount for each year of service. The
Company's funding policy is to pay at least the minimum contribution required
by the Employee Retirement Income Security Act of 1974.
Net periodic pension cost for the three plans included the following
components:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost $486,332 $365,414 $384,307
Interest cost on projected
benefit obligation 402,909 380,587 329,340
Return on plan assets (444,026) (152,604) (124,179)
Amortization of unrecognized
net assets at transition 7,836 (232,055) (223,508)
Net periodic pension cost $453,051 $361,342 $365,960
</TABLE>
The funded status of the three pension plans is reconciled to prepaid
(accrued) pension cost as follows:
<TABLE>
<CAPTION>
JULY 29, JULY 30,
1995 1994
<S> <C> <C>
Plan assets at fair value $5,303,778 $4,768,284
Actuarial present value of benefit
obligations:
Vested benefits 4,301,071 4,220,550
Non-vested benefits 421,911 99,212
Accumulated benefit obligations 4,722,982 4,319,762
Effect of future increases in
compensation levels 827,812 908,207
Projected benefit obligation 5,550,794 5,227,969
Projected benefit obligation
in excess of plan assets (247,016) (459,685)
Unamortized prior service cost 390,987 529,845
Unrecognized net loss 307,465 298,317
Remaining unrecognized net asset
at July 25, 1987 (amortized
over 15 years) (435,869) (498,314)
Additional liability -- (168,523)
Prepaid (accrued) pension cost $ 15,567 $(298,360)
</TABLE>
Plan assets are invested principally in government securities, common
stocks and mutual funds.
Assumptions used in determining the net fiscal 1995, 1994 and 1993 periodic
pension cost were:
<TABLE>
<CAPTION>
<S> <C>
Assumed discount rate 8 to 8.5%
Assumed rate of increase in compensation levels 4%
Expected rate of return on plan assets 8 to 8.5%
</TABLE>
The Company also participates in several multiemployer pension plans for
which the 1995, 1994 and 1993 contributions were $1,785,000, $1,814,000 and
$1,822,000, respectively.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The Company is under contract to purchase a tract of land, contingent upon
receiving all approvals, on which it plans to construct a superstore. Costs
incurred related to this project are included in construction in progress as
the Company believes such costs will be recoverable from the development of
the property.
The Company's general liability insurer can make premium calls for premiums
paid for the years ended December 1, 1992 through December 1, 1994. Based on
advice from the insurer, the Company has recorded liabilities for the
estimated premium calls.
The Company is involved in litigation incidental to the normal course of
business. Company management is of the opinion that insurance coverage is
adequate and final disposition should not materially affect the consolidated
financial position of the Company.
Village Super Market, Inc. and Subsidiaries
Independent Auditors' Report
The Board of Directors and Shareholders
Village Super Market, Inc.:
We have audited the accompanying consolidated balance sheets of Village
Super Market, Inc. and subsidiaries as of July 29, 1995 and July 30, 1994,
and the related consolidated statements of operations, shareholders' equity
and cash flows for each of the years in the three-year period ended
July 29, 1995. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Village
Super Market, Inc. and subsidiaries at July 29, 1995 and July 30,
1994, and the results of their operations and their cash flows for each of
the years in the three-year period ended July 29, 1995 in conformity with
generally accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, the
Company adopted the provisions of Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," as of August 1, 1993.
KPMG PEAT MARWICK LLP
Short Hills, New Jersey
September 29, 1995
Stock Price and Dividend Information
The Class A common stock of Village Super Market, Inc. is traded on the
NASDAQ Stock Market under the symbol "VLGEA." The table below sets forth the
high and low last reported sales price for the fiscal year indicated.
<TABLE>
<CAPTION>
CLASS A STOCK
High Low
<S> <C> <C>
1995
4th Quarter 8 6-3/4
3rd Quarter 7- 3/4 6-3/4
2nd Quarter 8 6-3/4
1st Quarter 8-1/2 7
1994
4th Quarter 9 7-1/2
3rd Quarter 9 7-1/2
2nd Quarter 9-3/4 7-1/2
1st Quarter 9-3/4 8-1/4
</TABLE>
As of September 30, 1995, there were 521 holders of record of the Company's
Class A common stock.
No dividends were paid during fiscal 1995 and 1994.
Village Super Market, Inc. and Subsidiaries
Village Super Market Inc.
CORPORATE DIRECTORY
OFFICERS AND DIRECTORS
PERRY SUMAS
CHIEF EXECUTIVE OFFICER AND PRESIDENT; DIRECTOR
JAMES SUMAS
CHAIRMAN OF THE BOARD; CHIEF OPERATING OFFICER
AND TREASURER; DIRECTOR
ROBERT SUMAS
EXECUTIVE VICE PRESIDENT AND SECRETARY; DIRECTOR
WILLIAM SUMAS
EXECUTIVE VICE PRESIDENT; DIRECTOR
JOHN SUMAS
EXECUTIVE VICE PRESIDENT; DIRECTOR
CAROL LAWTON
VICE PRESIDENT AND ASSISTANT SECRETARY
FRANK SAURO
GENERAL COUNSEL
KEVIN BEGLEY
CHIEF FINANCIAL OFFICER
GEORGE J. ANDRESAKES
DIRECTOR
JOHN J. McDERMOTT
DIRECTOR
NORMAN CRYSTAL
DIRECTOR
EXECUTIVE OFFICES
733 Mountain Avenue
Springfield, New Jersey 07081
REGISTRAR AND TRANSFER AGENT
Midlantic National Bank
Edison, New Jersey
AUDITORS
KPMG Peat Marwick LLP
150 John F. Kennedy Parkway
Short Hills, New Jersey
FORM 10-K
Copies of the Company's Form 10-K as filed with the Securities and Exchange
Commission are available without charge upon written request to:
Mr. Robert Sumas, Secretary
Village Super Market, Inc.
733 Mountain Avenue
Springfield, New Jersey 07081
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-29-1995
<PERIOD-END> JUL-29-1995
<CASH> 9655
<SECURITIES> 0
<RECEIVABLES> 2678
<ALLOWANCES> 0
<INVENTORY> 24179
<CURRENT-ASSETS> 40284
<PP&E> 131871
<DEPRECIATION> 61955
<TOTAL-ASSETS> 135575
<CURRENT-LIABILITIES> 44039
<BONDS> 34853
<COMMON> 19164
0
0
<OTHER-SE> 33837
<TOTAL-LIABILITY-AND-EQUITY> 135575
<SALES> 677322
<TOTAL-REVENUES> 677322
<CGS> 511451
<TOTAL-COSTS> 511451
<OTHER-EXPENSES> 160927
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4031
<INCOME-PRETAX> 913
<INCOME-TAX> 335
<INCOME-CONTINUING> 578
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 578
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
