SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended: October 25, 1997
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 of 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)
(973) 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>
November 24, 1997
<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 Statement 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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
October 25, July 26,
1997 1997
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 4,827 $ 4,270
Merchandise inventories 25,238 24,836
Patronage dividend receivable 3,289 2,048
Miscellaneous receivables 3,541 3,269
Other current assets 865 850
Total current assets 37,760 35,273
Property, equipment and fixtures, net 72,348 72,293
Investment in related party 10,380 10,351
Goodwill, net 10,281 10,339
Other intangibles, net 2,220 2,284
Other assets 2,237 2,223
TOTAL ASSETS $135,226 $132,764
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Current portion of long-term debt $ 2,660 $ 3,260
Accounts payable to related party 25,782 27,141
Accounts payable and accrued expenses 16,494 17,017
Income taxes payable 414 462
Total current liabilities 45,350 47,880
Long-term debt, less current portion 28,704 24,027
Deferred income taxes 3,626 3,776
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares 18,129 18,129
Class B common stock - no par value,
issued & outstanding 1,594,076 shares 1,035 1,035
Retained earnings 44,567 44,102
Less cost of treasury shares - (447,000 shares) (6,185) (6,185)
Total shareholders' equity 57,546 57,081
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $135,226 $132,764
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
13 Weeks Ended 13 Weeks Ended
October 25, 1997 October 26, 1996
<S> <C> <C>
Sales $ 169,888 $ 169,200
Cost of sales 127,776 127,341
Gross margin 42,112 41,859
Operating and administrative
expense 38,723 38,669
Depreciation and amortization
expense 1,764 1,823
Operating income 1,625 1,367
Interest expense (net) 809 894
Income before income
taxes 816 473
Provision for income taxes 351 189
Net Income $ 465 $ 284
Weighted average number of
common shares outstanding 2,909,876 2,909,876
Net income per share $ .16 $ .10
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
13 Weeks Ended 13 Weeks Ended
October 25, 1997 October 26, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 465 $ 284
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization 1,764 1,823
Deferred taxes (150) -
Provision to value inventories at LIFO 150 150
Changes in assets and liabilities:
(Increase) decrease in inventory ( 552) 172
(Increase) in patronage dividend
receivable (1,241) ( 922)
(Increase) in misc. receivables ( 272) ( 811)
(Increase) in other current assets ( 15) ( 5)
(Increase) in other assets ( 14) ( 23)
Increase (decrease) in accounts
payable to related party (1,359) 559
(Decrease) in accounts payable and
accrued expenses ( 523) ( 23)
(Decrease) in income taxes payable ( 48) -
Net cash provided (used) by operating
activities (1,795) 1,204
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (1,696) (1,891)
Investment in related party ( 29) ( 59)
Net cash used by investing activities (1,725) (1,950)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 5,000 4,100
Principal payments of long-term debt ( 923) (3,151)
Net cash provided by financing
activities 4,077 949
NET INCREASE IN CASH AND
CASH EQUIVALENTS 557 203
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 4,270 3,244
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 4,827 $ 3,447
</TABLE>
See accompanying Notes to Consolidated 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 October 25, 1997 and July 26, 1997 and the
results of operations and cash flows for the periods ended October 25,
1997 and October 26, 1996.
The significant accounting policies followed by the Company
are set forth in Note 1 to the Company's financial statements in the
July 26, 1997 Village Super Market, Inc. Annual Report.
2. The results of operations for the period ended October 25,
1997 are not necessarily indicative of the results to be expected for
the full year.
3. At both October 25, 1997 and July 26, 1997, approximately 66%
of merchandise inventories are valued by the LIFO method while the
balance is valued by FIFO. If the FIFO method had been used for the
entire inventory, inventories would have been $7,729,000 and $7,579,000
higher than reported at October 25, 1997 and July 26, 1997 respectively.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales in the first quarter were $169,888,000 compared with
$169,200,000 in the first quarter of the prior year. Same store
sales increased 1.5% in the quarter, reflecting improved sales in
remodeled stores, which was partially offset by sales declines in
stores affected by competitive openings. One store was closed since
one year ago.
Gross margin as a percentage of sales increased to 24.8% from
24.7% in the prior year. This improvement in gross margin is due to
a slightly improved mix of sales in higher margin departments.
Operating and administrative expenses as a percentage of sales were
22.8% in both years. Savings from lower workers' compensation claims
this year were partially offset by accruals for estimated liability
insurance premium calls.
Depreciation expense declined in the current quarter due to certain
assets becoming fully depreciated. Interest expense declined in the
current quarter due to lower average debt levels.
The increase in net income of 64% in the quarter was due to the
improvement in same store sales, higher gross margins, lower workers'
compensation claims, lower depreciation and lower interest expense.
These improvements were partially offset by a higher tax rate in the
quarter.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $7,590,000 at
October 25, 1997 compared to $12,607,000 at July 26, 1997. The current
ratio increased to .83 at October 25, 1997 from .74 at July 26, 1997.
The Company's working capital needs are reduced by its high rate of
inventory turnover 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.
During the quarter, $5,000,000 of additional borrowings under the
Company's credit facilities were used to make principal payments on
long-term debt in the amount of $923,000, to fund $1,696,000 of capital
expenditures and to fund cash used by operations. The majority of capital
expenditures in the quarter related to the early stages of the expansion
and remodel of the Livingston store and a minor remodel of the Watchung
store.
At October 25, 1997, $8,000,000 was outstanding of the Company's
total available credit facility of $24,000,000. The Company was in full
compliance with all terms and restrictive covenants of all debt agreements
at October 25, 1997.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits
Exhibit 28(a) - Press Release dated November 21, 1997.
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: November 26, 1997 /s/ Perry Sumas
Perry Sumas
(President)
Date: November 26, 1997 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
EXHIBIT 28(a)
VILLAGE SUPER MARKET, INC.
REPORTS RESULTS FOR THE FIRST QUARTER ENDED
OCTOBER 25, 1997
Springfield, New Jersey - November 21, 1997 - Village Super Market,
Inc. reported sales and net income for the first quarter ended October 25,
1997, Perry Sumas, President announced today.
Net income was $465,000 (16 cents per share) in the first quarter of
fiscal 1998, an increase of 64% from the prior year. Sales for the
first quarter were $169,888,000 compared with $169,200,000 in the
prior year. Same store sales improved 1.5% in the quarter.
The significant increase in net income in the quarter was due to
the improvement in same store sales, higher gross margins, lower workers'
compensation claims, lower depreciation and lower interest expense. Same
store sales increased due to the positive impact of remodeled stores,
which was partially offset by sales declines in stores affected by
competitive openings. These improvements were partially offset by a
higher tax rate in the quarter.
Village Super Market operates a chain of 22 supermarkets under the
ShopRite name in New Jersey and eastern Pennsylvania. The following table
summarizes Village's results for the quarter ended October 25, 1997:
13 Weeks Ended 13 Weeks Ended
October 25, 1997 October 26, 1996
Sales $169,888,000 $169,200,000
Net Income $ 465,000 $ 284,000
Net Income Per Share $ .16 $ .10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-26-1997
<PERIOD-END> OCT-25-1997
<CASH> 4827
<SECURITIES> 0
<RECEIVABLES> 3541
<ALLOWANCES> 0
<INVENTORY> 25238
<CURRENT-ASSETS> 37760
<PP&E> 142742
<DEPRECIATION> 70394
<TOTAL-ASSETS> 135226
<CURRENT-LIABILITIES> 45350
<BONDS> 28704
0
0
<COMMON> 19164
<OTHER-SE> 38382
<TOTAL-LIABILITY-AND-EQUITY> 135226
<SALES> 169888
<TOTAL-REVENUES> 169888
<CGS> 127776
<TOTAL-COSTS> 127776
<OTHER-EXPENSES> 40487
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 809
<INCOME-PRETAX> 816
<INCOME-TAX> 351
<INCOME-CONTINUING> 465
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 465
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
