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 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>
February 28, 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>
The Registrant was not involved in bankruptcy proceedings during the preceding
five years or any time prior thereto.
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
Exhibit 28 (b) . . . . . . . . . . . . . . . . . . . . . 13
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
January 27, 1996 July 29, 1995
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 8,223 $ 9,655
Merchandise inventories 24,931 24,179
Patronage dividend receivable 1,083 2,683
Miscellaneous receivables 3,209 3,137
Prepaid expenses 577 630
Total current assets 38,023 40,284
Property, equipment and fixtures, net 68,648 69,916
Investment in related party 10,057 9,820
Goodwill, net 10,761 10,871
Other intangibles, net 2,658 2,791
Other assets 1,937 1,892
Total assets $ 132,084 $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 29,872 25,584
Accounts payable and accrued expenses 13,917 12,603
Deferred income taxes 772 772
Total current liabilities 49,641 44,039
Long-term debt, less current portion 24,067 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 & outstandin 1,035 1,035
Retained earnings 41,355 40,022
Less cost of treasury shares (6,185) (6,185)
Total shareholders' equity 54,334 53,001
Total liabilities and shareholders'
equity $ 132,084 $ 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 Wk End 13 Wk End 26 Wk End 26 Wk End
Jan 27,1996 Jan 28,1995 Jan 27,1996 Jan 28,1995
<S> <C> <C> <C> <C>
Sales $ 178,002 $ 171,804 $ 344,524 $ 339,170
Cost of sales 134,311 129,964 259,798 256,704
Gross margin 43,691 41,840 84,726 82,466
Operating &
administrative
expenses 39,649 37,739 77,395 75,102
Depreciation and
amortization expense 2,073 2,133 4,146 4,242
Operating income 1,969 1,968 3,185 3,122
Interest expense,
net 966 1,048 1,951 2,069
Gain (loss) on
disposal of assets 952 (190) 952 (190)
Income before provision
for income taxes 1,955 730 2,186 863
Provision for income tax
expense 761 294 853 344
Net income $ 1,194 $ 436 $ 1,333 $ 519
Weighted average number
of common shares out-
standing 2,909,876 2,909,876 2,909,876 2,909,876
Net income per share $ .41 $ .15 $ .46 $ .18
</TABLE>
See accompanying notes to consolidated condensed financial statements.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
26 Weeks Ended 26 Weeks Ended
January 27, 1996 January 28, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 1,333 $ 519
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 4,146 4,242
Deferred taxes 360 ---
Provision to value inventories at LIFO 300 300
(Gain) loss on disposal of assets (952) ---
Changes in assets and liabilities:
(Increase) decrease in inventory (1,052) 237
Decrease in patronage dividend
receivable 1,600 1,665
(Increase) in misc. receivables (72) (750)
Decrease in prepaid expenses 53 40
(Increase) in other assets (45) (325)
Increase in accounts payable to
related party 4,288 3,915
Increase (decrease) in accounts payable
and accrued expenses 1,314 (1,286)
Net cash provided by operating
activities 11,273 8,557
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,921) (3,549)
Investment in related party ( 237) ( 239)
Proceeds from sale of assets, net 1,238 ---
Net cash used in investing activities (1,920) (3,788)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt --- 3,000
Principal payments of long-term debt (10,785) (3,898)
Net cash used by financing activities (10,785) ( 898)
NET INCREASE(DECREASE)IN CASH
AND CASH EQUIVALENTS (1,432) 3,871
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 9,655 7,246
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 8,223 $ 11,117
</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 January 27, 1996 and July 29, 1995
and the results of operations and cash flows for the periods ended
January 27, 1996 and January 28, 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 January 27, 1996
are not necessarily indicative of the results to be expected for the
full year.
3. At both January 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 $7,113,000 and
$6,813,000 higher than reported at January 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 second quarter of fiscal 1996 were $178,002,000,
an increase of 3.6% from the second 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 six months ended January 27, 1996 were $344,524,000, an
increase of 1.6% from the prior year. The increase in sales for the
sixth month period was entirely attributable to the improved sales
in the second quarter, as first quarter same store sales were even
with 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 six
months ended January 27, 1996 increased to 24.5% and 24.6%,
respectively, compared with 24.4% and 24.3%, respectively, in the
corresponding prior year periods. These improvements in gross
margin are primarily due to an improved mix of sales in high margin
departments and aggressive buying practices.
Operating and administrative expenses as a percentage of sales
for the quarter and six months increased to 22.3% and 22.5%,
respectively, compared with 22.0% and 22.1%, respectively, in the
corresponding prior year periods. These increases were due to
higher coupon, advertising, snow removal and utility costs.
Advertising and coupon costs increased in response to competitive
entries and a more aggressive promotional program. Snow removal and
utility costs increased due to the harsh winter in the northeast.
Partially offsetting these higher costs were lower store payroll and
fringe benefit costs.
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 has
been recorded in the second quarter.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $11,618,000 at
January 27, 1996 as compared to $3,755,000 at July 29, 1995. The
current ratio decreased to .77 at January 27, 1996 compared to .91
at July 29, 1995.
The decline in working capital at January 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 six month period, cash provided by operating
activities of $11,273,000 was used to reduce debt outstanding by
$10,785,000 and to fund $2,921,000 of capital projects. This
resulted in a cash decrease of $1,432,000. At January 27, 1996
there was no balance outstanding on the Company's $12,000,000 line
of credit.
The majority of capital expenditures in the six month period
related to the ongoing remodel and expansion 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.
During the January quarter, 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, during the second quarter, 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 fiscal year. The Company expects to
close on both pieces of property during the third quarter using
principally seller financing and the proceeds from the sale of the
Maplewood property in November 1995. The Company expects to begin
construction in the fourth quarter and to complete the store in
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 January 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 February 29, 1996.
Exhibit 28(b) First Quarter Report to Shareholders
dated December 8, 1995.
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: February 29, 1996 /s/ Perry Sumas
Perry Sumas (President)
Date: February 29, 1996 /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 27, 1996
Springfield, NJ - February 29, 1996 - Village Super Market, Inc.
reported sales and net income for the second quarter and six months
ended January 27, 1996, Perry Sumas, President announced today.
Net income was $1,194,000 in the second quarter of fiscal 1996
compared to $436,000 in the prior year. Sales in the second quarter
increased 3.6% to $178,002,000.
Net income in the second quarter included a net gain of
$581,000 on the sale of a property. The remaining improvement in
net income results from the same store sales increase of 3.6%,
improved gross margins and lower depreciation and interest expense.
These improvements were partially offset by higher operating
expenses.
For the sixth month period, sales were $344,524,000, a 1.6%
increase from the prior year. Net income for the sixth month period
was $1,333,000 compared with $519,000 in the prior year.
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 27, 1996.
<TABLE>
<CAPTION>
January 27, 1996 January 28, 1995
13 Weeks Ended
<S> <C> <C>
Sales $178,002,000 $171,804,000
Net Income $ 1,194,000 $ 436,000
Net Income Per Share $ .41 $ .15
</TABLE>
<TABLE>
<CAPTION>
26 Weeks Ended
<S> <C> <C>
Sales $344,524,000 $339,170,000
Net Income $ 1,333,000 $ 519,000
Net Income per share $ .46 $ .18
</TABLE>
Exhibit 28 (b)
To Our Shareholders:
The Company had net income of $139,000 in the first quarter ended
October 28, 1995, an increase of 67% over the prior year.
Sales in the first quarter were $166,522,000. This is a slight
decrease from the prior year as the Easton store was opened for a
short period of time in the prior fiscal year. Same store sales
were flat in the first quarter as the effects of new competitive
entries were offset by improved sales at two stores remodeled last
year.
Gross margins as a percentage of sales increased to 24.6% in the
current quarter compared with 24.3% in the corresponding quarter one
year ago. This improvement in gross margins was primarily due to an
improved mix of sales in higher margin departments and aggressive
buying practices.
Operating and administrative expense as a percentage of sales
increased to 22.7% compared to 22.3% in the prior year. This
increase was due to higher coupon and supply costs. Coupon costs
were higher in response to new competitive entries. Higher supply
costs reflect the increased cost of paper bags that began during the
prior fiscal year.
The Company is currently expanding and remodeling its Absecon store.
In addition, the Company continues to seek approval for a new
superstore in Westfield and Garwood, New Jersey.
The table on the next page summarizes Village's results for the
quarter ended October 28, 1995.
Respectfully,
Perry Sumas, James Sumas,
President Chairman of the Board
December 8, 1995
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
13 Weeks Ended 13 Weeks Ended
October 28, 1995 October 29, 1994
<S> <C> <C>
Sales $166,522,000 $167,366,000
Net Income $ 139,000 $ 83,000
Net Income Per Share $ .05 $ .03
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET COMPARISONS
October 28, 1995 July 29, 1995
<S> <C> <C>
Current Assets $ 34,758,000 $ 40,284,000
Current Liabilities $ 41,053,000 $ 44,039,000
Net Working Capital (Deficit) $ (6,295,000) $ (3,755,000)
Long Term Debt $ 31,511,000 $ 34,852,000
Stockholders' Equity $ 53,140,000 $ 53,001,000
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-29-1995
<PERIOD-START> JUL-30-1995
<PERIOD-END> JAN-27-1996
<CASH> 8223
<SECURITIES> 0
<RECEIVABLES> 3209
<ALLOWANCES> 0
<INVENTORY> 24931
<CURRENT-ASSETS> 38023
<PP&E> 133356
<DEPRECIATION> 64708
<TOTAL-ASSETS> 132084
<CURRENT-LIABILITIES> 49641
<BONDS> 24067
<COMMON> 19164
0
0
<OTHER-SE> 39212
<TOTAL-LIABILITY-AND-EQUITY> 132084
<SALES> 344524
<TOTAL-REVENUES> 344524
<CGS> 259798
<TOTAL-COSTS> 259798
<OTHER-EXPENSES> 80589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1951
<INCOME-PRETAX> 2186
<INCOME-TAX> 853
<INCOME-CONTINUING> 1333
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1333
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
