<PAGE> 1
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 January 28, 1995
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>
March 3, 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>
The Registrant was not involved in bankruptcy proceedings during the
preceding five years or any time prior thereto.
<PAGE> 2
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
Exhibit 28 (b) . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
<PAGE> 3
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VILLAGE SUPER MARKET,INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
January 28, 1995 July 30, 1994
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 11,117 $ 7,246
Merchandise inventories 24,736 25,273
Patronage dividend receivable 1,118 2,783
Miscellaneous receivables 3,009 2,259
Prepaid expenses 540 580
Total current assets 40,520 38,141
Property, equipment and fixtures, net 70,965 71,414
Investment in related party 9,655 9,416
Goodwill, net 11,021 11,138
Other intangibles, net 2,918 3,045
Other assets 1,964 1,639
Total assets $ 137,043 $ 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 27,862 23,947
Accounts payable & accrued expenses 11,044 12,330
Deferred income taxes 815 815
Total current liabilities 44,817 42,241
Long-term debt, less current portion 36,088 36,933
Deferred income taxes 3,196 3,196
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares (including
447,000 in treasury) 18,129 18,129
Class B common stock - no par value
1,594,076 shares issued & outstanding 1,035 1,035
Retained earnings 39,963 39,444
Less cost of treasury shares (6,185) (6,185)
Total shareholders' equity 52,942 52,423
Total liabilities and shareholders'
equity $ 137,043 $ 134,793
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE> 4
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
13 Weeks End 13 Weeks End 26 Weeks End 25 Weeks End
Jan 28, 1995 Jan 22, 1994 Jan 28, 1995 Jan 22, 1994
<S> <C> <C> <C> <C>
Sales $ 171,804 $ 176,707 $ 339,170 $ 335,452
Cost of sales 129,964 133,810 256,704 253,615
Gross margin 41,840 42,897 82,466 81,837
Operating and
administrative
expenses 37,739 39,547 75,102 75,261
Depreciation and
amortization
expense 2,133 2,134 4,242 4,322
Operating income 1,968 1,216 3,122 2,254
Interest expense,
net 1,048 954 2,069 1,884
Loss on disposal
of assets 190 --- 190 81
Income before provision
for income taxes
and cumulative effect
of accounting change 730 262 863 289
Provision for income
tax expense 294 105 344 116
Income before
cumulative effect
of accounting change 436 157 519 173
Cumulative effect of
change in accounting
for income taxes --- --- --- 400
Net income $ 436 $ 157 $ 519 $ 573
Net income per share:
Weighted average number
of common shares
outstanding 2,909,876 2,909,876 2,909,876 2,909,876
Income before cumulative
effect of accounting
change $ .15 $ .06 $ .18 $ .06
Cumulative effect of
accounting change --- --- --- .14
Net income $ .15 $ .06 $ .18 $ .20
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE> 5
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
26 Weeks Ended 25 Weeks Ended
January 28, 1995 January 22, 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 519 $ 573
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of accounting change --- (400)
Depreciation and amortization 4,242 4,322
Deferred taxes --- (124)
Provision to value inventories at LIFO 300 300
Loss on disposal of assets --- 81
Changes in assets and liabilities:
(Increase) decrease in inventory 237 (188)
Decrease patronage dividend receivable 1,665 1,878
(Increase) decrease misc. receivables (750) 2,085
Decrease in prepaid expenses 40 17
(Increase) decrease in other assets (325) 672
Increase in accounts payable to
related party 3,915 775
(Decrease) in accounts payable and
accrued expenses (1,286) (2,233)
(Decrease) in income taxes payable --- ( 265)
Net cash provided by operating
activities 8,557 7,493
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,549) (2,433)
Investment in related party ( 239) ( 322)
Proceeds from sale of assets, net --- 358
Net cash used in investing activities (3,788) (2,397)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term
debt 3,000 3,000
Principal payments of long-term debt ( 3,898) (6,094)
Net cash used by financing activities ( 898) (3,094)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 3,871 2,002
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,246 6,619
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 11,117 $ 8,621
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE> 6
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 January 28, 1995 and July 30, 1994 and the
results of operations and cash flows for the periods ended January 28,
1995 and January 22, 1994.
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 from 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 January 28, 1995 are
not necessarily indicative of the results to be expected for the full
year.
3. At both January 28, 1995 and July 30, 1994 approximately 68% of the
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 $6,768,000 and $6,468,000 higher
than reported at January 28, 1995 and July 30, 1994, respectively.
<PAGE> 7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- ------------------------------------------------------------------------
RESULTS OF OPERATIONS
Sales for the second quarter of fiscal 1995 were $171,804,000, a
decrease of 2.8% from the second quarter of the prior year. Same store
sales decreased 1.7% in the quarter. Sales were also lower due to the
closing of the Easton store in August 1994. Same store sales declined
due to the effects of new competitive entries, comparison to a prior
year number that was inflated by high promotional spending, and
continued sluggishness in the economy. Sales for the twenty-six weeks
ended January 28, 1995 were $339,170,000, an increase of 1.1% from the
prior year. Sales increased for the six month period due to the current
year containing an additional week compared to the prior year. This
increase was partially offset by lower sales due to stores closed since
one year ago and lower same store sales of .9%.
Gross margins as a percentage of sales for the quarter and six months
ended January 28, 1995 were 24.4% and 24.3%, respectively, compared with
24.3% and 24.4%, respectively, in the corresponding prior year periods.
Price competition in the marketplace and continued high levels of sale
item penetration have prevented increases in gross margin percentages.
Operating and administrative expenses as a percentage of sales for the
quarter and six months decreased to 22.0% and 22.1%, respectively,
compared with 22.4% in both 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 fringe benefit and
supply costs. Promotional costs, particularly coupons, declined from
the unusually high levels in the second quarter one year ago, which in
part contributed to the lower same store sales.
Interest expense increased in fiscal 1995 due to higher interest
rates.
<PAGE> 8
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $4,297,000 at January
28, 1995 as compared to $4,100,000 at July 30, 1994. The current ratio
remained at .90. During the six month period, net cash provided by
operating activities of $8,557,000 and increased borrowings under the
revolving line of credit of $3,000,000 resulted in a net increase of
cash of $3,871,000 after payments of long term debt of $3,898,000 and
capital expenditures of $3,549,000. The amount outstanding on the line
of credit is $7,000,000 at January 28, 1995.
The majority of capital expenditures in the current fiscal year relate
to the completed expansion and remodel of the Stirling and Hillsborough
stores and the ongoing expansion and remodel of the Chester store. 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 January 28, 1995, the Company was in compliance with all provisions
of its revolving/term loan agreement. 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 credit line), declaring
dividends and executing new leases. The Company is currently
negotiating with this lender for relief under certain provisions of the
debt agreement.
<PAGE> 9
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits:
Exhibit 28(a) Press Release dated March 3, 1995.
Exhibit 28(b) First Quarter Report to Shareholders
dated December 14, 1994.
6(b) Reports on form 8-K.
None.
<PAGE> 10
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: March 8, 1995 /s/ Perry Sumas
Perry Sumas (President)
Date: March 8, 1995 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
Exhibit 28 (a)
VILLAGE SUPER MARKET, INC. REPORTS RESULTS
FOR THE QUARTER AND SIX MONTHS ENDED JANUARY 28, 1995
Springfield, N.J. - March 3, 1995 - Village Super Market, Inc. reported
sales and net income for the second quarter and six months ended January
28, 1995, Perry Sumas, President announced today.
Net income was $436,000 in the second quarter of fiscal 1995 compared
to $157,000 in the prior year. Sales for the second quarter were
$171,804,000, a decrease of 2.8% from the prior year.
Sales decreased as a result of stores closed since one year ago and a
same store sales decrease of 1.7%. Same store sales decreased due to
competitive openings, a sluggish economy and a comparison to a year ago
period that was inflated by heavy promotional spending. Mr. Sumas
commented that net income increased, despite lower sales, due to more
efficient use of labor and reduced promotional costs, particularly
coupons.
For the six month period, sales were $339,170,000, an increase of 1.1%
from the prior year. Sales increased due to the current year containing
twenty-six weeks, one more than the prior year. This increase was
partially offset by the impact of stores closed since one year ago and
lower same store sales of .9%. Net income for the six month period was
$519,000 compared to income before the cumulative effect of an
accounting change of $173,000 a year ago.
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
six months ended January 28, 1995.
<TABLE>
<CAPTION>
January 28, 1995 January 22, 1994
13 Weeks Ended
<S> <C> <C>
Sales $171,804,000 $176,707,000
Net Income $ 436,000 $ 157,000
Net Income Per Share $ .15 $ .06
26 Weeks Ended 25 Weeks Ended
Sales $339,170,000 $335,452,000
Income before accounting
change $ 519,000 $ 173,000
Cumulative effect of
accounting change $ --- $ 400,000
Net Income $ 519,000 $ 573,000
Net Income per share:
Income before accounting
change $ .18 $ .06
Cumulative effect of
accounting change $ --- $ .14
Net Income $ .18 $ .20
</TABLE>
To Our Shareholders:
The Company had net income of $83,000 in the first quarter ended October
29, 1994, compared to income before an accounting change of $16,000 in
the prior year first quarter.
Sales in the first quarter 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. 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.
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.
The Company recently completed remodels of its Stirling and Hillsborough
stores. In addition, a remodel and expansion of the Chester store is
currently underway.
The following table summarizes Village's results for the quarter ended
October 29, 1994
Respectfully,
Perry Sumas, James Sumas,
President Chairman of the Board
December 14, 1994
<PAGE> 2
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
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
BALANCE SHEET COMPARISONS
October 29, 1994 July 30, 1994
Current Assets $ 39,189,000 $ 38,141,000
Current Liabilities 42,089,000 42,241,000
Net Working Capital (Deficit) (2,900,000) (4,100,000)
Long Term Debt 37,889,000 36,933,000
Stockholders' Equity 52,506,000 52,423,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-30-1994
<PERIOD-END> JAN-28-1995
<CASH> 11117
<SECURITIES> 0
<RECEIVABLES> 3009
<ALLOWANCES> 0
<INVENTORY> 24736
<CURRENT-ASSETS> 40520
<PP&E> 131271
<DEPRECIATION> 60306
<TOTAL-ASSETS> 137043
<CURRENT-LIABILITIES> 44817
<BONDS> 36088
<COMMON> 19164
0
0
<OTHER-SE> 33778
<TOTAL-LIABILITY-AND-EQUITY> 137043
<SALES> 339170
<TOTAL-REVENUES> 339170
<CGS> 256704
<TOTAL-COSTS> 256704
<OTHER-EXPENSES> 79534
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2069
<INCOME-PRETAX> 863
<INCOME-TAX> 344
<INCOME-CONTINUING> 519
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 519
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
