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: April 26, 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)
(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 4, 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 1 PAGE NO.
FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 3
Consolidated Condensed Statement of Income 4
Consolidated Condensed Statement 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) 13-14
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
April 26, July 27,
1997 1996
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 3,332 $ 3,244
Merchandise inventories 23,727 25,118
Patronage dividend receivable 1,418 2,483
Miscellaneous receivables 3,687 2,947
Prepaid expenses 622 616
Total current assets 32,786 34,408
Property, equipment and fixtures, net 72,294 71,356
Investment in related party 10,321 10,174
Goodwill, net 10,430 10,605
Other intangibles, net 2,347 2,538
Other assets 2,013 1,981
TOTAL ASSETS $130,191 $131,062
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Current portion of long-term debt $ 3,839 $ 5,038
Accounts payable to related party 25,051 24,616
Accounts payable and accrued expenses 15,945 15,196
Deferred income taxes 443 443
Total current liabilities 45,278 45,293
Long-term debt, less current portion 24,851 26,814
Deferred income taxes 3,948 3,948
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 and outstanding 1,035 1,035
Retained earnings 43,135 42,028
Less cost of treasury shares (6,185) (6,185)
Total shareholders' equity 56,114 55,007
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $130,191 $131,062
</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 39 Weeks Ended 39 Weeks Ended
April 26, 1997 April 27, 1996 April 26, 1997 April 27, 1996
<S> <C> <C> <C> <C>
Sales $ 165,494 $ 169,279 $ 512,291 $ 513,803
Cost of Sales 124,386 127,232 385,404 387,030
Gross margin 41,108 42,047 126,887 126,773
Operating and
admin. expenses 38,122 39,079 116,918 116,474
Depreciation and
amortization
expense 1,915 2,097 5,603 6,243
Operating income 1,071 871 4,366 4,056
Interest expense 799 776 2,521 2,727
Gain on disposal
of assets --- --- --- 952
Income before
provision for
income taxes 272 95 1,845 2,281
Provision for
income tax
expense 109 39 738 892
Net Income $ 163 $ 56 $ 1,107 $ 1,389
Net income per share:
Weighted average
number of common
shares out-
standing 2,909,876 2,909,876 2,909,876 2,909,876
Net income $ .06 $ .02 $ .38 $ .48
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
39 Weeks Ended 39 Weeks Ended
April 26, 1997 April 27, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 1,107 $ 1,389
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 5,603 6,243
Deferred taxes - 360
Provision to value inventories at LIFO 450 450
(Gain) loss on disposal of assets - (952)
Change in assets and liabilities:
(Increase) decrease in inventory 941 (1,232)
Decrease in patronage dividend receivable 1,065 984
(Increase) in misc. receivables (740) (331)
(Increase) decrease in prepaid expense (6) 30
(Increase) in other assets (32) (67)
Increase (decrease) in accounts payable to
related party 435 (970)
Increase in accounts payable and accrued
expenses 749 656
Net cash provided by operating activities 9,572 6,560
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (6,670) (7,224)
Investment in related party (147) (296)
Proceeds from sale of assets, net - 1,238
Net cash used in investing activities (6,817) (6,282)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 2,500 ---
Principal payments of long-term debt (5,167) (8,431)
Net cash used by financing activities (2,667) (8,431)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 88 (8,153)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 3,244 9,655
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 3,332 $ 1,502
</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 26, 1997 and July 27, 1996 and the results of
operations and cash flows for the periods ended April 26, 1997 and
April 27, 1996.
The significant accounting policies followed by the Company are set
forth in Note 1 to the Company's financial statements in the July 27,
1996 Village Super Market, Inc. Annual Report.
2. The results of operations for the period ended April 26, 1997 are not
necessarily indicative of the results to be expected for the full year.
3. At both April 26, 1997 and July 27, 1996 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 $7,736,000 and $7,286,000 higher
than reported at April 26, 1997 and July 27, 1996, respectively.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales in the third quarter of fiscal 1997 were $165,494,000, a
decrease of 2.2% from the prior year. Same store sales decreased
1.1% in the third quarter due to sales declines in stores affected by
competitive openings and due to a comparison to a year ago period
that included strong sales related to last year's harsh winter.
These factors were partially offset by improved sales at remodeled stores.
The remainder of the sales decrease is due to the closing of the store
in Florham Park, New Jersey on October 26, 1996. Sales for the
nine month period were $512,291,000 compared with sales of $513,803,000
in the prior year. Same store sales for the nine month period increased
.5%, which was partially offset by the store closing.
Gross margin as a percentage of sales for both the quarter and nine
months ended April 26, 1997 was 24.8% compared with 24.8% and 24.7%,
respectively, in the corresponding prior year periods. An
improvement in the mix of sales toward higher margin departments
offset a decline in meat department gross margins due to lower
retail prices.
Operating and administrative expenses as a percentage of sales for
the quarter and nine months were 23.0% and 22.8%, respectively, compared
with 23.1% and 22.7%, respectively, in the corresponding prior year.
Operating expenses declined slightly in the quarter due to lower coupon
and payroll costs, partially offset by increased advertising costs,
increased credit card processing costs and lower coupon processing
income.
On October 26, 1996, the Company closed an underfacilitated store
in Florham Park, New Jersey. A loss of $350,000 was incurred in the
first quarter from the operations and closing costs associated with
this store. The prior year second quarter included a $952,000 gain
from selling a property in Maplewood, New Jersey.
Depreciation expense declined in the quarter and nine month
period due to substantial assets purchased 10 years ago becoming fully
depreciated.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $12,492,000 at
April 26, 1997 compared to $10,885,000 at July 27, 1996. The current ratio
decreased to .72 at April 26, 1997 compared to .76 at July 27, 1996.
During the nine month period, cash provided by operating activities
of $9,572,000 and additional long-term borrowings of $2,500,000 were used
to make principal payments on long-term debt in the amount of $5,167,000
and to fund $6,670,000 of capital expenditures.
The majority of capital expenditures in the nine month period
related to the expansion and remodel of the Absecon, Chester and
Stroudsburg stores.
On May 30, 1997, the Company replaced its expiring $12,000,000
(outstanding balance of $3,400,000 at April 26, 1997) line of credit.
The new $24,000,000 facility, secured by substantially all of the
Company's assets, consists of a three year, $13,000,000 working capital
revolving loan and a $11,000,000 convertible revolving loan. The
$13,000,000 convertible revolving loan may be borrowed over three years
to fund equipment purchases and store remodels. Amounts outstanding on
the convertible revolving loan at the end of each of the three years will
convert to seven year term loans.
Indebtedness under this agreement bears interest based on either
the prime rate or the Eurodollar rate, at the Company's option, plus
applicable margins based on the Company's fixed charge coverage ratio.
Currently, the Company may borrow at prime, or at LIBOR plus 150 basis
points. The Company is required to maintain certain levels of interest
rate protection. This agreement contains restrictive covenants similar
to the expiring agreement.
As part of the above agreement, the Company replaced the term loan
outstanding under the prior credit facility of $8,065,000 with a secured
term loan under the current credit facility for an identical amount and
amortization schedule. Although this loan bears interest at floating
rates, an interest rate swap agreement has been executed to effect a
fixed rate of interest of 8.35%, subject to the incentive pricing
mentioned above.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits
Exhibit 28(a) Press Release dated June 5, 1997.
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 6, 1997 /s/ Perry Sumas____________
Perry Sumas
(President)
Date: June 6, 1997 /s/ Kevin Begley___________
Kevin Begley
(Chief Financial Officer)
Exhibit 28(a)
VILLAGE SUPER MARKET,INC. REPORTS RESULTS
FOR THE QUARTER AND NINE MONTHS ENDED APRIL 26, 1997
Springfield, New Jersey - June 5, 1997. Village Super Market, Inc.
reported sales and net income for the third quarter and nine months
ended April 26, 1997, Perry Sumas, President announced today.
Net income was $163,000 in the third quarter of fiscal 1997, an
increase of 191% from the prior year. Sales in the third quarter were
$165,494,000, a decrease of 2.2% from the prior year. Same store sales
declined 1.1%.
Net income improved in the quarter, despite lower same store sales
and flat gross margins, due to lower operating expenses and lower
depreciation. Same store sales declined due to reduced sales in certain
stores facing competitive openings and a comparison to a year ago quarter
that included stronger sales related to last year's harsh winter.
These factors were somewhat offset by higher sales in stores that
had been remodeled. Operating costs declined due to lower payroll and
coupon costs, partially offset by increased advertising and credit card
processing costs.
For the nine month period, sales were $512,291,000 compared with
$513,803,000 in the prior year. Same store sales increased .5% in the
nine month period. Net income for the nine month period was $1,107,000,
an increase of 35% from the prior year, excluding a gain on the sale of
an asset in the prior year.
The following table summarizes Village's results for the quarter
and nine month periods ended April 26, 1997:
April 26, 1997 April 27, 1996
13 Weeks Ended
Sales $165,494,000 $169,279,000
Net Income $ 163,000 $ 56,000
Net Income Per Share $ .06 $ .02
39 Weeks Ended
Sales $512,291,000 $513,803,000
Net Income $ 1,107,000 $ 1,389,000
Net Income Per Share $ .38 $ .48
Exhibit 28(b)
*
S * To Our Shareholders:
E * The Company had net income of $660,000 in the second quarter ended
January 25, 1997, an increase of 6% excluding a gain on the sale of
C * an asset in the prior year. Sales in the second quarter of fiscal
1997 were $177,598,000 compared with sales of $178,002,000 in the
O * second quarter of the prior year. Same store sales increased 1% in
the second quarter, reflecting improved sales in remodeled stores
N * partially offset by sales declines in those stores effected by
competitive openings.
D *
For the first six months of fiscal 1997, the Company had net income
* of $944,000, a 24% increase from the prior year, exclusive of the
gain on sale. Sales for the six month period were $346,797,000
* compared with $344,524,000 in the prior year. Same store sales
increased 1.3% in the six month period. A store in Florham Park,
Q * New Jersey was closed on October 26, 1996.
U * Gross margin as a percentage of sales for the quarter and six months
ended January 25, 1997 increased to 24.7% in both periods compared
A * with 24.5% and 24.6%, respectively, in the corresponding prior year
periods. These improvements in gross margin are primarily due to an
R * improved mix of sales in higher margin departments.
T * Operating and administrative expenses as a percentage of sales for the
quarter and six months increased to 22.6% and 22.7%, respectively,
E * compared with 22.3% and 22.5%, respectively, in the corresponding
prior year periods. These increase were primarily due to higher
R * advertising, coupon and credit card costs.
* Net income in the quarter and six month periods improved due to the
same store sales increase, improved gross margins and lower depreciation
* and interest costs.
R * The Company completed the expansion and remodel of the Absecon store
this year and has begun the expansion of the Stroudsburg and Chester
E * stores.
P * The table accompanying this report summarizes Village's results for
the quarter and six month period ended January 25, 1997.
O *
R * Respectfully,
T * Perry Sumas James Sumas
President Chairman of the Board
*
March 6, 1997
*
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
13 Weeks Ended 13 Weeks Ended
January 25, 1997 January 27, 1996
<S> <C> <C>
Sales $177,598,000 $178,002,000
Net Income $ 660,000 $ 1,194,000
Net Income Per Share .23 .41
26 Weeks Ended 26 Weeks Ended
January 25, 1997 January 27, 1996
Sales $346,797,000 $344,524,000
Net Income $ 944,000 $ 1,333,000
Net Income Per Share .32 .46
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET COMPARISONS
January 25, 1997 July 27, 1996
<S> <C> <C>
Current Assets $ 33,982,000 $ 34,408,000
Current Liabilities $ 48,777,000 $ 45,293,000
Net Working Capital (Deficit) $(14,795,000) $(10,855,000)
Long-Term Debt $ 21,696,000 $ 26,814,000
Stockholders' Equity $ 55,951,000 $ 55,007,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-27-1996
<PERIOD-END> APR-26-1997
<CASH> 3332
<SECURITIES> 0
<RECEIVABLES> 3687
<ALLOWANCES> 0
<INVENTORY> 23727
<CURRENT-ASSETS> 32786
<PP&E> 139208
<DEPRECIATION> 66914
<TOTAL-ASSETS> 130191
<CURRENT-LIABILITIES> 45278
<BONDS> 24851
0
0
<COMMON> 19164
<OTHER-SE> 36950
<TOTAL-LIABILITY-AND-EQUITY> 130191
<SALES> 512291
<TOTAL-REVENUES> 512291
<CGS> 385404
<TOTAL-COSTS> 385404
<OTHER-EXPENSES> 122521
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2521
<INCOME-PRETAX> 1845
<INCOME-TAX> 738
<INCOME-CONTINUING> 1107
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<NET-INCOME> 1107
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
