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 25, 1998
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 1, 1998__
<S> <C>
Class A, Common Stock, No Par Value 1,375,800 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 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
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 25, July 26,
1998 1997
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 4,000 $ 4,270
Merchandise inventories 26,189 24,836
Patronage dividend receivable 1,222 2,048
Miscellaneous receivables 3,672 3,269
Other current assets 855 850
Total current assets 35,938 35,273
Property, equipment and fixtures, net 74,241 72,294
Investment in related party 10,438 10,351
Goodwill, net 10,164 10,339
Other intangibles, net 2,093 2,284
Other assets 2,264 2,223
TOTAL ASSETS $135,138 $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 26,192 27,141
Accounts payable and accrued expenses 17,478 17,017
Income taxes payable 182 462
Total current liabilities 46,512 47,880
Long-term debt, less current portion 25,409 24,027
Deferred income taxes 3,276 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,
1,594,076 shares issued and outstanding 1,035 1,035
Retained earnings 46,482 44,102
Less cost of treasury shares (387,000
shares at April 25, 1998 and 447,000
shares at July 26, 1997) (5,705) (6,185)
Total shareholders' equity 59,941 57,081
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $135,138 $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 Wks End 13 Wks End 39 Wks End 39 Wks End
Apr 25,1998 Apr 26,1997 Apr 25,1998 Apr 26,1997
<S> <C> <C> <C> <C>
Sales $ 169,594 $ 165,494 $ 522,182 $ 512,291
Cost of Sales 126,765 124,386 392,164 385,404
Gross margin 42,829 41,108 130,018 126,887
Operating and
admin. expenses 38,727 38,122 117,933 116,918
Depreciation and
amortization
expense 1,975 1,915 5,529 5,603
Operating income 2,127 1,071 6,556 4,366
Interest expense 745 799 2,380 2,521
Income before
income taxes 1,382 272 4,176 1,845
Provision for
income taxes 594 109 1,796 738
Net Income $ 788 $ 163 $ 2,380 $ 1,107
Net income
per share:
Basic $ .27 $ .06 $ .81 $ .38
Diluted $ .26 $ .06 $ .80 $ .38
</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 25, 1998 April 26, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 2,380 $ 1,107
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 5,529 5,603
Deferred taxes (500) -
Provision to value inventories at LIFO 225 450
Change in assets and liabilities:
(Increase) decrease in inventory (1,578) 941
Decrease in patronage dividend receivable 826 1,065
(Increase) in misc. receivables (403) (740)
(Increase) in other current assets (5) (6)
(Increase) in other assets (53) (32)
Increase (decrease) in accounts payable to
related party (949) 435
Increase in accounts payable and accrued
expenses 461 749
(Decrease) in income taxes payable (280) -
Net cash provided by operating activities 5,653 9,572
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,098) (6,670)
Investment in related party (87) (147)
Net cash used in investing activities (7,185) (6,817)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 4,700 2,500
Proceeds from exercise of 60,000 stock options 480 -
Principal payments of long-term debt (3,918) (5,167)
Net cash provided (used) by financing
activities 1,262 (2,667)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (270) 88
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 4,270 3,244
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 4,000 $ 3,332
</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 25, 1998 and July 26, 1997 and the results of
operations and cash flows for the periods ended April 25, 1998 and
April 26, 1997.
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 April 25, 1998 are not
necessarily indicative of the results to be expected for the full year.
3. At both April 25, 1998 and July 26, 1997 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 $7,804,000 and $7,579,000 higher
than reported at April 25, 1998 and July 26, 1997, respectively.
4. In accordance with Statement of Financial Accounting Standards
No. 128, "Earnings Per Share," the consolidated statement of income
includes the presentation of both basic and diluted net income per
share. Basic net income per share was computed by dividing net income
by the weighted-average number of common shares outstanding, which was
2,969,876 and 2,943,187 for the quarter and nine month periods ended
April 25, 1998, respectively. Diluted net income per share was
calculated by increasing the denominator from the basic calculations to
reflect the dilutive impact of stock options outstanding.
The number of shares added to the denominator was 50,538 and
24,748 for the quarter and nine month periods ended April 25, 1998,
respectively. The options outstanding were not dilutive in the fiscal
1997 periods presented.
The diluted net income per share calculations include the effect
of 219,000 options granted on December 5, 1997 under the 1997 Incentive
and Non-Statutory Stock Option Plan. All options were granted at an
exercise price equal to fair market value.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales in the third quarter of fiscal 1998 increased 2.5% to
$169,594,000. This same store sales increase reflects improved sales
in most stores, particularly those that were recently remodeled, partially
offset by sales declines in stores affected by competitive openings.
Sales for the nine month period increased 1.9% to $522,182,000.
Same store sales increased 2.3% in the nine month period.
Gross margin as a percentage of sales was 25.2% and 24.9% for the
quarter and nine month periods ended April 25, 1998, respectively,
compared with 24.8% in both of the corresponding prior year periods.
The improvement in gross margin for the quarter is due to an improved mix
of sales toward higher margin departments and to improved gross margins
in several departments.
Operating and administrative expenses as a percentage of sales for
the quarter and nine months ended April 25, 1998 declined to 22.8% and
22.6%, respectively, compared with 23.0% and 22.8%, respectively, in
the corresponding prior year periods. The improvement in operating
expenses as a percentage of sales for the quarter was a result of lower
worker's compensation claims and the effect of spreading fixed
costs over an improved sales base. These improvements were partially
offset by higher coupon costs associated with Easter promotions.
The increase in net income of 383% in the quarter was due to the
2.5% improvement in same store sales, the increased gross margin
percentage and lower operating costs as a percentage of sales due to
reduced worker's compensation claims.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $10,574,000 at
April 25, 1998 compared to $12,607,000 at July 26, 1997. The current
ratio increased to .77 at April 25, 1998 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 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 nine month period, cash provided by operating activities
of $5,653,000, additional long-term borrowings of $4,700,000 and proceeds
from the exercise of stock options of $480,000 were used to make
principal payments on long-term debt in the amount of $3,918,000 and
to fund capital expenditures of $7,098,000. Capital expenditures in the
nine month period related primarily to the ongoing expansion and remodel
of the Livingston store, minor remodels of the Watchung and Bernardsville
stores and upgrades to retail technology systems.
At April 25, 1998, $7,700,000 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 April 25, 1998.
IMPACT OF YEAR 2000
The Company has participated, along with the food cooperative to
which it belongs, in an assessment of its computerized systems to determine
their ability to correctly identify the year 2000 and is devoting the
necessary internal and external resources to replace, upgrade or modify
all significant systems which do not correctly identify the year 2000.
The Company anticipates that all systems will be year 2000 compliant
before the end of 1999. However, if such modifications and conversions
are not completed timely, or if computer systems of third parties with
whom the Company deals are not converted in a timely manner, the year
2000 problem may have a material impact on the operations of the Company.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits
Exhibit 28(a) - Press Release dated June 2, 1998.
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 2, 1998 /s/ Perry Sumas
Perry Sumas
(President)
Date: June 2, 1998 /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 25, 1998
Springfield, New Jersey - June 2, 1998 - Village Super Market, Inc.
reported sales and net income for the third quarter and nine months
ended April 25, 1998.
Net income was $788,000 (26 cents per diluted share) in the third quarter
of fiscal 1998, an increase of 383% from the prior year. Sales for the
quarter were $169,594,000, which represents a same store sales increase
of 2.5%.
The significant increase in net income in the quarter was due to
the improved same store sales, increased gross margin percentages and
lower operating costs as a percentage of sales. Gross margins
increased due to an improved mix of sales towards higher margin
departments and increased gross margins in several departments.
Operating costs decreased due to lower worker's compensation claims
and the spreading of fixed costs over a higher sales base, which was
partially offset by increased coupon costs.
For the nine month period, sales were $522,182,000, an increase of
1.9% from the prior year. Same store sales increased 2.3% in the nine
month period. Net income for the nine month period was $2,380,000, an
increase of 115% from the prior year.
Village Super Market operates a chain of 22 supermarkets under the
ShopRite name in New Jersey and eastern Pennsylvania. The following table
summarizes results for the quarter and nine months ended April 25, 1998:
<TABLE>
<CAPTION>
April 25, 1998 April 26, 1997
13 Weeks Ended
<S> <C> <C>
Sales $169,594,000 $165,494,000
Net Income $ 788,000 $ 163,000
Net Income Per Share - Basic $ .27 $ .06
Net Income Per Share - Diluted $ .26 $ .06
39 Weeks Ended
Sales $522,182,000 $512,291,000
Net Income $ 2,380,000 $ 1,107,000
Net Income Per Share - Basic $ .81 $ .38
Net Income Per Share - Diluted $ .80 $ .38
</TABLE>
Exhibit 28(b)
S* To Our Shareholders:
E* The Company had net income of $1,127,000 in the second quarter ended
January 24, 1998, an increase of 71% from the prior year. Sales in the
C* second quarter of fiscal 1998 were $182,700,000, which represents a same
store sales increase of 2.9%. Same store sales increased due to the
O* positive impact of remodeled stores and increased Thanksgiving
promotional activities, partially offset by sales declines in stores
N* affected by competitive openings.
D* For the first six months of fiscal 1998, the Company had net income of
$1,592,000, an increase of 69% from the prior year. Sales for the six
* month period were $352,588,000, an increase of 1.7% from the prior year.
Same store sales increased 2.2% in the six month period.
Q* Gross margin as a percentage of sales was 24.7% in the quarter and six
month periods of both fiscal 1998 and 1997. A slight improvement due to
U* improved mix of sales in higher margin departments was offset by lower
produce department gross margins
A* due to lower retail prices.
R* Operating and administrative expenses as a percentage of sales for the
quarter and six months declined to 22.2% and 22.5%, respectively,
T* compared with 22.6% and 22.7%, respectively, in the corresponding prior year
periods. The improvement in operating expenses as a percentage of sales
E* for the quarter was a result of lower payroll costs, lower workers'
compensation claims and the effect of spreading fixed costs over a much
R* higher sales base. These improvements were partially offset by higher
coupon costs associated with Thanksgiving turkey promotions.
R* Net income in the quarter and six month periods improved due to higher same
store sales and lower operating costs due to improvements in payroll and
E* workers' compensation claims.
P* Capital expenditures for the six month period were $4,430,000, which relate
primarily to the expansion and remodel of the Livingston store, a minor
O* remodel of the Watchung store and an upgrade to the point of sale
software.
R*
The table accompanying this report summarizes Village Super Market's
T* results for the quarter and six month periods ended January 24, 1998.
* Respectfully,
* Perry Sumas James Sumas
President Chairman of the Board
*
* March 6, 1998
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
13 Weeks Ended 13 Weeks Ended
January 24, 1998 January 25, 1997
<S> <C> <C>
Sales $ 182,700,000 $ 177,598,000
Net Income $ 1,127,000 $ 660,000
Net Income Per Share $ .38 $ .23
26 Weeks Ended 26 Weeks Ended
January 24, 1998 January 25, 1997
Sales $ 352,588,000 $ $46,797,000
Net Income $ 1,592,000 $ 944,000
Net Income Per Share $ .54 $ .32
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET COMPARISONS
January 24, 1998 July 26, 1997
<S> <C> <C>
Current Assets $ 36,533,000 $ 35,273,000
Current Liabilities $ 50,311,000 $ 47,880,000
Net Working Capital (Deficit) $ (13,778,000) $ (12,607,000)
Long-Term Debt $ 22,044,000 $ 24,027,000
Stockholders' Equity $ 59,153,000 $ 57,081,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-26-1997
<PERIOD-END> APR-25-1998
<CASH> 4000
<SECURITIES> 0
<RECEIVABLES> 3672
<ALLOWANCES> 0
<INVENTORY> 26189
<CURRENT-ASSETS> 35938
<PP&E> 140258
<DEPRECIATION> 66017
<TOTAL-ASSETS> 135138
<CURRENT-LIABILITIES> 46512
<BONDS> 25409
0
0
<COMMON> 19164
<OTHER-SE> 44053
<TOTAL-LIABILITY-AND-EQUITY> 135138
<SALES> 522182
<TOTAL-REVENUES> 522182
<CGS> 392164
<TOTAL-COSTS> 392164
<OTHER-EXPENSES> 123462
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2380
<INCOME-PRETAX> 4176
<INCOME-TAX> 1796
<INCOME-CONTINUING> 2380
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2380
<EPS-PRIMARY> .81
<EPS-DILUTED> .80
</TABLE>
