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 29, 2000
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>
March 1, 2000
<S> <C>
Class A Common Stock, No Par Value 1,404,700 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- 8
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures . . . . . . . . . . . . . . . . . . . . . 10
Exhibit 28(a). . . . . . . . . . . . . . . . . . . . 11
Exhibit 28(b).. . . . . . . . . . . . . . . . . . 12-13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
January 29, July 31,
2000 1999
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 30,689 $ 9,771
Merchandise inventories 30,866 29,923
Patronage dividend receivable 369 1,728
Miscellaneous receivables 5,297 3,729
Other current assets 1,183 1,119
Total current assets 68,404 46,270
Property, equipment and fixtures, net 74,588 75,307
Investment in related party, at cost 10,867 10,698
Goodwill, net 11,117 11,287
Other intangibles, net 1,649 1,776
Other assets 4,989 4,217
TOTAL ASSETS $171,614 $149,555
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 1,713 $ 2,149
Accounts payable to related party 28,805 27,086
Accounts payable and accrued expenses 23,623 23,496
Income taxes payable 708 736
Total current liabilities 54,849 53,467
Long-term debt, less current portion 43,420 27,204
Deferred income taxes 2,207 2,407
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 & outstanding 1,035 1,035
Retained earnings 56,929 52,409
Less cost of treasury shares
(358,100 shares at January 29, 2000
and 368,300 shares at July 31, 1999) (4,955) (5,096)
Total shareholders' equity 71,138 66,477
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $171,614 $149,555
</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. Ended 13 Wks. Ended 26 Wks. Ended 26 Wks. Ended
Jan. 29, 2000 Jan. 23, 1999 Jan. 29, 2000 Jan. 23, 1999
<S> <C> <C> <C> <C>
Sales $ 210,681 $ 192,633 $ 406,094 $ 370,692
Cost of sales 155,662 143,585 299,864 276,526
Gross margin 55,019 49,048 106,230 94,166
Operating and
administrative
expense 48,031 44,276 93,111 84,650
Depreciation and
amortization
expense 2,062 1,863 3,976 3,792
Operating income 4,926 2,909 9,143 5,724
Interest expense 813 796 1,660 1,575
Income before
income taxes 4,113 2,113 7,483 4,149
Provision for income
taxes 1,584 888 2,924 1,743
Net Income $ 2,529 $ 1,225 $ 4,559 $ 2,406
Net income
per share:
Basic $ .84 $ .41 $ 1 .52 $ .81
Diluted $ .83 $ .40 $ 1 .50 $ .79
</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 Wks Ended 26 Wks Ended
Jan 29, 2000 Jan 23, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 4,559 $ 2,406
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 3,976 3,792
Deferred taxes ( 200) ( 150)
Provision to value inventories at LIFO 250 250
Changes in assets and liabilities:
(Increase) in inventory ( 1,193) (2,930)
Decrease in patronage dividend
Receivable 1,359 1,578
(Increase) in misc. receivables ( 1,568) ( 937)
(Increase) decrease in other
current assets ( 64) 5
(Increase) in other assets ( 772) ( 386)
Increase in accounts
payable to related party 1,719 2,414
Increase in accounts payable and
accrued expenses 127 2,614
Increase (decrease) in income taxes
payable ( 28) 81
Net cash provided by operating
activities: 8,165 8,737
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (2,960) (4,320)
Investment in related party ( 169) ( 26)
Net cash used by investing activities (3,129) (4,346)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 30,000 3,931
Proceeds from exercise of stock options 102 47
Principal payments of long-term debt ( 14,220) (2,025)
Net cash provided by financing activities 15,882 1,953
NET INCREASE IN CASH
AND CASH EQUIVALENTS 20,918 6,344
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 9,771 5,679
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 30,689 $ 12,023
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, 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 29, 2000 and the consolidated results of operations
and cash flows for the periods ended January 29, 2000 and January 23, 1999.
The significant accounting policies followed by the Company are set forth
in Note 1 to the Company's consolidated financial statements in the
July 31, 1999 Village Super Market, Inc. Annual Report.
2. The results of operations for the period ended January 29, 2000 are not
necessarily indicative of the results to be expected for the full year.
3. At both January 29, 2000 and July 31, 1999 approximately 67% 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 $8,558,000 and $8,308,000 higher than reported
at January 29, 2000 and July 31, 1999, respectively.
4. The number of common shares outstanding for calculation of net income
per share is as follows:
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
1/29/00 1/23/99 1/29/00 1/23/99
<S> <C> <C> <C> <C>
Weighted Average Shares
Outstanding - Basic 2,994,985 2,970,824 2,992,408 2,970,350
Dilutive Effect of Employee
Stock Options 47,768 68,418 52,233 77,864
Weighted Average Shares
Outstanding - Diluted 3,042,753 3,039,242 3,044,641 3,048,214
</TABLE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales in the second quarter of fiscal 2000 were $210,681,000,
an increase of 9.4% from the prior year. Same store sales increased
4.3% from the prior year. The remainder of the sales increase was due
to the acquisition of the Vineland store in May 1999. Same store sales
increased in most stores, particularly one that had been remodeled a
year ago, and were partially offset by sales declines in stores affected
by competitive openings. Sales for the six month period were $406,094,000,
a 9.6% increase from the prior year. Same store sales for the six month
period increased 4.6%. Same store sales for the six month period include
the benefit of 26 weeks of double coupon promotions in northern New Jersey
in fiscal 2000 compared with 20 weeks in fiscal 1999. Same store sales
increases for the remainder of fiscal 2000 are expected to be below the
current trend due to competitive openings and comparisons to strong results
in fiscal 1999.
Gross margin as a percentage of sales increased to 26.1% and 26.2%,
respectively, in the quarter and six month periods ended January 29,
2000 compared with 25.5% and 25.4%, respectively, in the corresponding
prior year periods. Gross margin percentages improved in most selling
departments, particularly the grocery department, when compared to the
prior year. In addition, a portion of the gross margin improvement was
due to special rebates received for the new Vineland store.
Operating and administrative expenses as a percentage of sales for the
quarter and six month periods were 22.8% and 22.9%, respectively,
compared with 23.0% and 22.8%, respectively, in the corresponding prior
year periods. Both the quarter and six month period of fiscal 2000 include
improvements from lower payroll and fringe benefit costs as a percentage of
sales. The six month period of fiscal 2000 includes 26 weeks of the cost
of doubling manufacturer coupons as compared to 20 weeks in the prior year.
Net income increased 106% in the quarter to $2,529,000. This increase is
primarily attributable to the 4.3% same store sales increase and the
substantially improved gross margin percentage.
LIQUIDITY AND FINANCIAL RESOURCES
On September 16, 1999 the Company issued $30,000,000 of 8.12% unsecured
Senior Notes. At the same time, the Company entered into a $15,000,000
unsecured revolving credit agreement. These two debt agreements replace
the $6,667,000 term loan and a $24,000,000 revolving credit facility,
both of which were secured by substantially all of the Company's assets.
The Company was in full compliance with all terms and restrictive
covenants of all debt agreements at January 29, 2000.
Current assets exceeded current liabilities by $13,555,000 at January 29,
2000 compared to current liabilities exceeding current assets by $7,197,000
at July 31, 1999. The working capital ratio increased to 1.25 at January 29,
2000 from .87 at July 31, 1999. These improvements were primarily due to
the increase in cash resulting from the financing described above, less the
$14,220,000 of long term debt that was paid off. 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 six month period, the Company had capital expenditures of
$2,960,000. The Company currently plans to spend approximately $14,000,000
on capital expenditures in fiscal 2000. Planned expenditures include the
replacement of the West Orange store, the start of a major remodel, the
purchase of land for a future store and technology upgrades. The Company
expects to fund these capital expenditures through operating cash flow
and cash on hand.
FORWARD-LOOKING STATEMENTS:
This Form 10-Q to shareholders contains "forward-looking statements"
within the meaning of federal securities law. The Company cautions the
reader that there is no assurance that actual results or business
conditions will not differ materially from future results, whether
expressed, suggested or implied by such forward-looking statements.
Such potential risks and uncertainties include, without limitation,
competitive pressures from the Company's operating environment, the
ability of the Company to maintain and improve its sales and margins,
the liquidity of the Company on a cash flow basis, the success of
operating initiatives, and other risk factors detailed herein and in
other filings 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 March 3, 2000.
Exhibit 28(b) - First Quarter Report to Shareholders
dated December 20, 1999.
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: March 3, 2000 /s/ Perry Sumas
Perry Sumas
(President)
Date: March 3, 2000 /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 29, 2000
Contact: Kevin Begley, C. F. O.
(973) 467-2200 - Ext. 220
Springfield, New Jersey - March 3, 2000 - Village Super Market, Inc.
reported sales and net income for the second quarter ended January 29, 2000,
Perry Sumas, President announced today.
Net income was $2,529,000 ($.83 per diluted share) in the second quarter
of fiscal 2000, an increase of 106% from the prior year.
Sales in the second quarter were $210,681,000, an increase of 9.4% from
the prior year. Same store sales increased 4.3% in the second quarter. The
remainder of the sales increase is due to the acquisition of a store in May
1999. The large improvement in second quarter net income compared to the
prior year is primarily a result of the improved same store sales and a
substantial increase in gross margin percentages.
For the six month period, net income increased 89% to $4,559,000 ($1.50
per diluted share). Sales were $406,094,000, an increase of 9.6% from the
prior year. Same store sales increased 4.6%.
Village Super Market operates a chain of 23 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 29, 2000:
<TABLE>
<CAPTION>
Jan 29, 2000 Jan 23, 1999
13 Wks Ended
<S> <C> <C>
Sales $210,681,000 $192,633,000
Net Income $ 2,529,000 $ 1,225,000
Net Income Per Share - Basic $ .84 $ .41
Net Income Per Share - Diluted $ .83 $ .40
26 Weeks Ended
Sales $406,094,000 $370,692,000
Net Income $ 4,559,000 $ 2,406,000
Net Income Per Share - Basic $ 1.52 $ .81
Net Income Per share - Diluted $ 1.50 $ .79
</TABLE>
This Press Release contains "forward-looking statements" within the
meaning of federal securities law. The Company cautions the reader that there
is no assurance that actual results or business conditions will not differ
materially from future results, whether expressed, suggested or implied by such
forward-looking statements. Such potential risks and uncertainties include,
without limitation, competitive pressures from the Company's operating
environment, the ability of the Company to maintain and improve its sales
and margins, the liquidity of the Company on a cash flow basis, the success
of operating initiatives, results of litigation and other risk factors
detailed in the Company's filings with the SEC.
Exhibit 28(b)
F
I To Our Shareholders:
R The Company had net income of $2,030,000 ($.67 per diluted share) in the
first quarter ended October 30, 1999, an increase of 72% from the first
S quarter of the
prior year. The significant increase in net income was due to a strong
T increase in same store sales and substantially improved gross margin
percentages, partially offset by increased costs from the doubling of
manufacturer coupons.
Q
Sales in the first quarter were $195,413,000, an increase of 9.7% from
U the prior year. Same store sales increased 4.9%. The remainder of the
sales increase was due to the acquisition of the Vineland store in May
A 1999. Same store sales increased, in part, due to all 13 weeks of the
current year's quarter including double coupons in northern New Jersey
R compared with seven weeks in the prior year.
T Gross margin as a percentage of sales increased to 26.2% from 25.3% in
the prior year. Gross margin percentages improved in most selling
E departments. In addition, a portion of the improvement was due to special
rebates received for the new Vineland store.
R
Operating and administrative expenses as a percentage of sales increased
to 23.1% from 22.7% in the prior year. This was a result of increased
R cost associated with the doubling of manufacturer coupons for a greater
Number of weeks in the current fiscal year.
E
The following table summarizes Village's results for the quarter ended
P October 30, 1999:
O
Respectfully,
R
T Perry Sumas James Sumas
President Chairman of the Board
December 20, 1999
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
13 Wks Ended 13 Wks Ended
Oct 30, 1999 Oct 24, 1998
<S> <C> <C>
Sales $195,413,000 $178,058,000
Net Income $ 2,030,000 $ 1,180,000
Net Income Per Share - Basic $ .68 $ .40
Net Income Per share - Diluted $ .67 $ .39
BALANCE SHEET COMPARISONS
Oct 30, 1999 July 31, 1999
Current Assets $ 61,093,000 $ 46,270,000
Current Liabilities $ 50,032,000 $ 53,467,000
Net Working Capital (Deficit) $ 11,061,000 $( 7,197,000)
Long Term Debt $ 43,778,000 $ 27,204,000
Stockholders' Equity $ 68,530,000 $ 66,477,000
</TABLE>
FORWARD-LOOKING STATEMENTS:
This letter contains "forward-looking statements" within the meaning of
Federal securities law. The Company cautions the reader that there is
no assurance that actual results or business conditions will not differ
materially from future results, whether expressed, suggested or implied
by such forward-looking statements. Such potential risks and uncertainties
include, without limitation, competitive pressures from the Company's
operating environment, the ability of the Company to maintain and improve
its sales and margins, the liquidity of the Company on a cash flow basis,
the success of operating initiatives, Y2K issues relating to computer
applications, results of litigation and other risk factors detailed in the
Company's filings with the SEC.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> JAN-29-2000
<CASH> 30689
<SECURITIES> 0
<RECEIVABLES> 5297
<ALLOWANCES> 0
<INVENTORY> 30866
<CURRENT-ASSETS> 68404
<PP&E> 154338
<DEPRECIATION> 79750
<TOTAL-ASSETS> 171614
<CURRENT-LIABILITIES> 54849
<BONDS> 43420
0
0
<COMMON> 19164
<OTHER-SE> 51974
<TOTAL-LIABILITY-AND-EQUITY> 171614
<SALES> 406094
<TOTAL-REVENUES> 406094
<CGS> 299864
<TOTAL-COSTS> 299864
<OTHER-EXPENSES> 97087
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1660
<INCOME-PRETAX> 7483
<INCOME-TAX> 2924
<INCOME-CONTINUING> 4559
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4559
<EPS-BASIC> 1.52
<EPS-DILUTED> 1.50
</TABLE>
