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: January 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)
(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 25,1997
<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>
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 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
Exhibit 28(b) . . . . . . . . . . . . . . . . . . . . 12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
January 25, July 27,
1997 1996
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 5,027 $ 3,244
Merchandise inventories 23,974 25,118
Patronage dividend receivable 514 2,483
Miscellaneous receivables 3,861 2,947
Prepaid expenses 606 616
Total current assets 33,982 34,408
Property, equipment and fixtures, net 71,214 71,356
Investment in related party 10,289 10,174
Goodwill, net 10,488 10,605
Other intangibles, net 2,411 2,538
Other assets 1,988 1,981
TOTAL ASSETS $130,372 $131,062
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Current portion of long-term debt $ 4,296 $ 5,038
Accounts payable to related party 28,101 24,616
Accounts payable and accrued expenses 15,937 15,196
Deferred income taxes 443 443
Total current liabilities 48,777 45,293
Long-term debt, less current portion 21,696 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 & outstanding 1,035 1,035
Retained earnings 42,972 42,028
Less cost of treasury shares (6,185) (6,185)
Total shareholders' equity 55,951 55,007
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $130,372 $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 26 Weeks Ended 26 Weeks Ended
Jan. 25, 1997 Jan. 27, 1996 Jan. 25, 1997 Jan. 27, 1996
<S> <C> <C> <C> <C>
Sales $ 177,598 $ 178,002 $ 346,797 $ 344,524
Cost of sales 133,678 134,311 261,018 259,798
Gross margin 43,920 43,691 85,779 84,726
Operating and
admin. expenses 40,131 39,649 78,799 77,395
Depreciation and
amortization
expense 1,865 2,073 3,688 4,146
Operating income 1,924 1,969 3,292 3,185
Interest expense,
net 824 966 1,719 1,951
Gain on disposal
of assets --- 952 --- 952
Income before
provision for
income taxes 1,100 1,955 1,573 2,186
Provision for
income tax expense 440 761 629 853
Net Income $ 660 $ 1,194 $ 944 $ 1,333
Weighted average
number of common
shares out-
standing 2,909,876 2,909,876 2,909,876 2,909,876
Net income
per share $ .23 $ .41 $ .32 $ .46
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
26 Weeks Ended 26 Weeks Ended
January 25, 1997 January 27, 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 944 $ 1,333
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 3,688 4,146
Deferred taxes --- 360
Provision to value inventories at LIFO 300 300
(Gain) on disposal of assets --- ( 952)
Changes in assets and liabilities:
(Increase) decrease in inventory 844 (1,052)
Decrease in patronage dividend
receivable 1,969 1,600
(Increase) in misc. receivables ( 914) ( 72)
Decrease in prepaid expenses 10 53
(Increase) in other assets ( 7) ( 45)
Increase in accounts
payable to related party 3,485 4,288
Increase in accounts payable and
accrued expenses 714 1,314
Net cash provided by operating
activities 11,060 11,273
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (3,797) (2,921)
Investment in related party ( 115) ( 237)
Proceeds from sale of assets, net --- 1,238
Net cash used by investing activities (3,912) (1,920)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 2,500 ----
Principal payments of long-term debt (7,865) (10,785)
Net cash used by financing activities (5,365) (10,785)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,783 (1,432)
CASH AND CASH EQUIVALENTS,
BEGINNING PERIOD 3,244 9,655
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 5,027 $ 8,223
</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 January 25, 1997 and July 27, 1996 and the
results of operations and cash flows for the periods ended January 25,
1997 and January 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 January 25,
1997 are not necessarily indicative of the results to be expected for
the full year.
3. At both January 25, 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 $7,586,000 and $7,286,000
higher than reported at January 25, 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 second quarter of fiscal 1997 were $177,598,000 compared
with sales of $178,002,000 in the second quarter of the prior year. Same
store sales increased 1% in the second quarter, reflecting improved sales in
remodeled stores partially offset by sales declines in those stores effected
by competitive openings. Sales for the six month period were $346,797,000
compared with $344,524,000 in the prior year. Same stores sales increased
1.3% in the six month period. A store in Florham Park, New Jersey was
closed on October 26, 1996.
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 with
24.5% and 24.6%, respectively, in the corresponding prior year periods.
These improvements in gross margin are primarily due to an improved mix of
sales in higher margin departments.
Operating and administrative expenses as a percentage of sales for
the quarter and six months increased to 22.6% and 22.7%, respectively,
compared with 22.3% and 22.5%, respectively, in the corresponding prior
year periods. These increases were primarily due to higher advertising,
coupon and credit card processing costs.
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 six month period due
to substantial assets purchased ten years ago becoming fully depreciated.
Interest expense declined in the quarter and six month periods due to lower
average debt levels outstanding in the current fiscal year.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $14,795,000 at
January 25, 1997 as compared to $10,885,000 at July 27, 1996. The current
ratio decreased to .70 at January 25, 1997 compared to .76 at July 27,
1996.
During the six month period, cash provided by operating activities of
$11,060,000 and additional long-term borrowings of $2,500,000 were used to
make principal payments on long-term debt in the amount of $7,865,000 and
to fund $3,797,000 of capital expenditures. The majority of capital
expenditures in the six month period related to the completion of the
expansion and remodel of the Absecon store and the start of the expansion
and remodels of the Chester and Stroudsburg stores.
At January 25, 1997 there was no borrowing outstanding on the
Company's $12,000,000 line of credit. The Company is currently in the
process of replacing this credit facility, which expires on March 31, 1997,
with a larger facility. The Company was in full compliance with all terms
and restrictive covenants of all debt agreements at January 25, 1997.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits
Exhibit 28(a) - Press Release dated February 28, 1997.
Exhibit 28(b) - First Quarter Report to Shareholders
dated December 11, 1996.
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 28, 1997 /s/ Perry Sumas____________
Perry Sumas
(President)
Date: February 28, 1997 /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 25,1997
Springfield, New Jersey - February 28, 1997. Village Super Market,
Inc. reported sales and net income for the second quarter and six months
ended January 25, 1997, Perry Sumas, President announced today.
Net income was $660,000 in the second quarter of fiscal 1997.
Excluding a gain on the sale of an asset in the prior year, this represents
an increase in net income of 6%. Sales in the second quarter were
$177,598,000 compared with $178,002,000 in the second quarter of the prior
year. Same store sales increased 1%.
Net income improved in the quarter due to the same store sales increase,
improved gross margins and lower depreciation and interest costs. Same store
sales increased due to the positive impact of remodeled stores exceeding
reduced sales from stores that faced new competitors. Gross margins increased
primarily as a result of improved product mix. Partially offsetting these
improvements are higher operating costs, primarily due to increased
advertising and coupon expense.
For the six month period, sales were $346,797,000 compared with
$344,524,000 in the prior year. Same store sales increased 1.3% in the six
month period. Net income for the six month period was $944,000, an increase
of 24% from the prior year, excluding the gain on the sale of an asset in the
prior year.
The following table summarizes Village's results for the quarter and six
months ended January 25, 1997:
<TABLE>
<CAPTION>
January 25, 1997 January 27, 1996
13 Weeks Ended
<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
Sales $346,797,000 $344,524,000
Net Income $ 944,000 $ 1,333,000
Net Income Per Share $ .32 $ .46
</TABLE>
Exhibit 28(b)
*
*
F * To Our Shareholders:
*
I * The Company had net income of $284,000 in the first quarter
* ended October 26, 1996, an increase of 104% over the prior year.
R *
* Sales in the first quarter were $169,200,000. This represents
S * a 1.6% same store sales increase. Sales improved in stores
* which were recently remodeled and in most stores not affected
T * by competitive openings. These improvements were somewhat offset
* by sales declines in three stores affected by competitive openings.
*
* Gross margin as a percentage of sales increased to 24.7% in the
Q * current quarter compared with 24.6% in the prior year. This
* improvement in gross margin is primarily due to an improved mix
U * of sales in higher margin departments.
*
A * Operating and administrative expenses as a percentage of sales
* increased to 22.8% from 22.7% in the prior year. This increase
R * was primarily due to higher advertising, coupon and credit card
* processing costs. These increases were partially offset by a
T * decline in payroll costs.
*
E * Net income improved due to the 1.6% same store sales increase,
* the improved gross margin and lower depreciation and interest
R * costs. These improvements were somewhat offset by costs associated
* with closing an underfacilitated store in Florham Park, New Jersey
* on October 26, 1996.
*
R * The Company recently completed the expansion and remodel of the
* Absecon store. Three additional stores will be expanded and
E * remodeled during fiscal 1997.
*
P * The table on the next page summarizes Village's results for the
* quarter ended October 26, 1996.
O *
* Respectfully,
R *
*
T * Perry Sumas James Sumas
* President Chairman of the Board
*
* December 11, 1996
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
13 Weeks Ended 13 Weeks Ended
October 26, 1996 October 28, 1995
<S> <C> <C>
Sales $169,200,000 $166,522,000
Net Income $ 284,000 $ 139,000
Net Income Per Share $ .10 $ .05
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET COMPARISONS
October 26, 1996 July 26, 1996
<S> <C> <C>
Current Assets $ 36,027,000 $ 34,408,000
Current Liabilities $ 45,829,000 $ 45,293,000
Net Working Capital (Deficit) $ (9,802,000) $(10,855,000)
Long-Term Debt $ 27,763,000 $ 26,814,000
Stockholders' Equity $ 55,291,000 $ 55,007,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-27-1996
<PERIOD-END> JAN-25-1997
<CASH> 5027
<SECURITIES> 0
<RECEIVABLES> 3861
<ALLOWANCES> 0
<INVENTORY> 23974
<CURRENT-ASSETS> 33982
<PP&E> 141386
<DEPRECIATION> 71214
<TOTAL-ASSETS> 130372
<CURRENT-LIABILITIES> 48777
<BONDS> 21696
0
0
<COMMON> 19164
<OTHER-SE> 40735
<TOTAL-LIABILITY-AND-EQUITY> 130372
<SALES> 346797
<TOTAL-REVENUES> 346797
<CGS> 261018
<TOTAL-COSTS> 261018
<OTHER-EXPENSES> 82487
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1719
<INCOME-PRETAX> 1573
<INCOME-TAX> 629
<INCOME-CONTINUING> 944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 944
<EPS-PRIMARY> .32
<EPS-DILUTED> .32
</TABLE>
