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 April 27, 1996
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>
June 1, 1996
<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>
VILLAGE SUPER MARKET, INC.
INDEX
Part I Page No.
Financial Information
Item 1. Financial Statements
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 . . . . . . . . . . . . . . . . . . . . . . 7-9
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . 11
Exhibit 28 (a) . . . . . . . . . . . . . . . . . . . . . 12
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
April 27, 1996 July 29, 1995
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 1,502 $ 9,655
Merchandise inventories 24,961 24,179
Patronage dividend receivable 1,699 2,683
Miscellaneous receivables 3,468 3,137
Prepaid expenses 600 630
Total current assets 32,230 40,284
Property, equipment and fixtures, net 70,975 69,916
Investment in related party 10,116 9,820
Goodwill, net 10,706 10,871
Other intangibles, net 2,592 2,791
Other assets 1,959 1,892
Total assets $ 128,578 $135,574
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Current portion of long-term debt $ 5,080 $ 5,080
Accounts payable to related party 24,614 25,584
Accounts payable and accrued expenses 13,259 12,603
Deferred income taxes 772 772
Total current liabilities 43,725 44,039
Long-term debt, less current portion 26,421 34,852
Deferred income taxes 4,042 3,682
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 41,411 40,022
Less cost of treasury shares (6,185) (6,185)
Total shareholders' equity 54,390 53,001
Total liabilities and shareholders'
equity $ 128,578 $ 135,574
</TABLE>
See accompanying notes to consolidated condensed financial statements.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
13 Wks End 13 Wks End 39 Wks End 39 Wks End
Apr 27,1996 Apr 29,1995 Apr 27,1996 Apr 29,1995
<S> <C> <C> <C> <C>
Sales $ 169,279 $ 164,453 $ 513,803 $ 503,624
Cost of sales 127,232 123,959 387,030 380,664
Gross margin 42,047 40,494 126,773 122,960
Operating and
administrative
expenses 39,079 37,855 116,474 112,956
Depreciation and
amortization expense 2,097 2,134 6,243 6,376
Operating income 871 505 4,056 3,628
Interest expense, net 776 991 2,727 3.060
Gain (loss) on disposal
of assets --- --- 952 (190)
Income (loss) before
provision for income taxes 95 (486) 2,281 378
Provision for income tax
expense (benefit) 39 (193) 892 151
Net income (loss) $ 56 $ (293) $ 1,389 $ 227
Net income (loss) per share:
Weighted average number
of common shares out-
standing 2,909,876 2,909,876 2,909,876 2,909,876
Net income (loss) $ .02 $ (.10) $ .48 $ .08
</TABLE>
See accompanying notes to consolidated condensed financial statements.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
39 Weeks Ended 39 Weeks Ended
April 27, 1996 April 29, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 1,389 $ 227
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 6,243 6,376
Deferred taxes 360 ---
Provision to value inventories at LIFO 450 450
(Gain) loss on disposal of assets (952) ---
Changes in assets and liabilities:
(Increase) decrease in inventory (1,232) 87
Decrease in patronage dividend receivable 984 813
(Increase) in misc. receivables (331) (485)
Decrease in prepaid expenses 30 31
(Increase) in other assets (67) (636)
(Decrease)in accounts payable to
related party (970) (1,321)
Increase (decrease) in accounts payable
and accrued expenses 656 (465)
Net cash provided by operating activities 6,560 5,077
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,224) (5,084)
Investment in related party ( 296) ( 345)
Proceeds from sale of assets, net 1,238 ---
Net cash used in investing activities (6,282) (5,429)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt --- 6,600
Principal payments of long-term debt ( 8,431) (4,553)
Net cash used by financing activities ( 8,431) 2,047
NET INCREASE(DECREASE)
IN CASH AND CASH EQUIVALENTS ( 8,153) 1,695
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 9,655 7,246
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,502 $ 8,941
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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 April 27, 1996 and July 29, 1995 and the results of operations and cash
flows for the periods ended April 27, 1996 and April 29, 1995.
The significant accounting policies followed by the Company are set
forth in Note 1 to the Company's financial statements in the July 29, 1995
Village Super Market, Inc. Annual Report.
2. The results of operations for the period ended April 27, 1996 are not
necessarily indicative of the results to be expected for the full year.
3. At both April 27, 1996 and July 29, 1995 approximately 66% 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 $7,263,000 and $6,813,000 higher than reported
at April 27, 1996 and July 29, 1995, respectively.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------
RESULTS OF OPERATIONS
Sales for the third quarter of fiscal 1996 were $169,279,000, an
increase of 2.9% from the third quarter of the prior year. This same store
sales increase is attributable to more aggressive promotional programs and
improved sales at remodeled stores. Sales for the nine months ended April 27,
1996 were $513,803,000, an increase of 2.0% from the prior year. The company
had 23 stores in operation in both fiscal years.
Gross margin as a percentage of sales for the quarter and nine months
ended April 27, 1996 increased to 24.8% and 24.7%, respectively, compared
with 24.6% and 24.4%, respectively, in the corresponding prior year periods.
These improvements in gross margin are primarily due to aggressive buying
practices and an improved mix of sales in high margin departments.
Operating and administrative expenses as a percentage of sales for the
quarter and nine months increased to 23.1% and 22.7%, respectively, compared
with 23.0% and 22.4%, respectively, in the corresponding prior year periods.
The slight increase in the third quarter was due to higher coupon, snow
removal and credit card processing costs. Coupon costs
increased in response to competitive entries and a more aggressive
promotional program. Partially offsetting these higher costs were lower
store payroll and fringe benefit costs.
Interest expense declined due to lower average debt levels, lower
interest rates and increased interest income in the current quarter.
In November, the Company sold the property of a store previously closed
in Maplewood, New Jersey for $1,238,000, net of certain costs. A gain before
taxes in the amount of $952,000 was recorded in the second quarter.
Net income was $56,000 compared with a net loss of $293,000 in the prior
year third quarter. This improvement was principally attributable to higher
same store sales, an increased gross margin percentage, and lower interest
expense.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $11,495,000 at April 27,
1996 compared to $3,755,000 at July 29, 1995. The current ratio decreased to
.74 at April 27, 1996 compared to .91 at July 29, 1995.
The decline in working capital at April 27, 1996 is primarily a result
of the Company discontinuing its previous policy of borrowing funds at the end
of each quarter to maintain the current ratio required in one of its debt
agreements. That agreement has been amended to delete the current ratio
maintenance requirement.
During the nine month period, cash provided by operating activities of
$6,560,000 was used to reduce debt outstanding by $8,431,000 and to fund
$7,224,000 of capital expenditures. This resulted in a cash decrease of
$8,153,000. At April 27,1996, $3,000,000 was outstanding on the Company's
$12,000,000 line of credit.
The majority of capital expenditures in the nine month period related to
the ongoing expansion and remodel of the Absecon store. The Company had
originally budgeted approximately $8,000,000 for capital expenditures in
fiscal 1996, the majority of which relates to the Absecon project. These
capital expenditures will be financed through internally generated funds and
borrowing under the credit facility.
As previously disclosed, the Company is under contract to purchase
properties in Westfield and Garwood, New Jersey on which the Company plans to
construct one superstore. Earlier this year, the tentative settlement that
had been reached with the town of Westfield to approve the building of a
superstore in both towns and to settle the Company's lawsuit against the
Westfield Planning Board was rejected by the Westfield Planning Board.
Also, the town of Garwood approved the Company's application to build a
superstore in Garwood. The Company now intends to build this superstore
entirely in the town of Garwood beginning this summer. During the April
quarter, the Company completed the purchase of one of the pieces of
property, primarily from the proceeds of the sale of the Maplewood
property. The Company expects to complete the acquisition of the
additional property in the fourth quarter using principally seller
financing. The Company expects to complete the construction of the store
in the later part of fiscal 1997. The Company believes it can obtain the
portion of the financing not already in place to complete this project,
including the necessary waivers from financial institutions.
At April 27, 1996, the Company was in compliance with all provisions of
all debt agreements.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits:
Exhibit 28(a) Press Release dated June 4, 1996.
Exhibit 28(b) Second Quarter Report to Shareholders
6(b) Reports on form 8-K.
None.
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: June 4, 1996 /s/ Perry Sumas
Perry Sumas (President)
Date: June 4, 1996 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
Exhibit 28 (a)
VILLAGE SUPER MARKET, INC. REPORTS RESULTS
FOR THE QUARTER AND NINE MONTHS ENDED APRIL 27, 1996
Springfield, NJ - June 4, 1996 - Village Super Market, Inc. reported sales
and net income for the third quarter and nine months ended April 27, 1996,
Perry Sumas, President announced today.
Net income was $56,000 in the third quarter of fiscal 1996 compared to a
net loss of $293,000 in the prior year. Sales in the third quarter increased
2.9% to $169,279,000. The improvement in net income in the third quarter was
primarily the result of the same store sales increase of 2.9% and improved
gross margin percentages.
For the nine month period, sales were $513,803,000, a 2% increase from
the prior year. Net income for the nine month period was $1,389,000 compared
to $227,000 in the prior year period. The nine month period includes a net
gain on the sale of property in the second quarter in the amount of $581,000.
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
nine months months ended April 27, 1996.
<TABLE>
<CAPTION>
April 27, 1996 April 29, 1995
13 Weeks Ended
<S> <C> <C>
Sales $169,279,000 $164,453,000
Net Income (Loss) $ 56,000 $ (293,000)
Net Income (Loss) Per Share $ .02 $ (.10)
</TABLE>
<TABLE>
<CAPTION>
39 Weeks Ended
<S> <C> <C>
Sales $513,803,000 $503,624,000
Net Income $ 1,389,000 $ 227,000
Net Income per share $ .48 $ .08
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-29-1995
<PERIOD-END> APR-27-1996
<CASH> 1502
<SECURITIES> 0
<RECEIVABLES> 3468
<ALLOWANCES> 0
<INVENTORY> 24961
<CURRENT-ASSETS> 32230
<PP&E> 136340
<DEPRECIATION> 65365
<TOTAL-ASSETS> 128578
<CURRENT-LIABILITIES> 43725
<BONDS> 26421
0
0
<COMMON> 19164
<OTHER-SE> 35226
<TOTAL-LIABILITY-AND-EQUITY> 128578
<SALES> 518803
<TOTAL-REVENUES> 518803
<CGS> 387030
<TOTAL-COSTS> 387030
<OTHER-EXPENSES> 126765
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2727
<INCOME-PRETAX> 2281
<INCOME-TAX> 892
<INCOME-CONTINUING> 1389
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1389
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
