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 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
(State of other jurisdiction of 22-1576170
incorporation or organization (I. R. S. Employer
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>
June 1, 2000
<S> <C>
Class A Common Stock, No Par Value 1,416,700 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 7-9
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 I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
April 29, July 31,
2000 1999
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 19,524 $ 9,771
Merchandise inventories 31,343 29,923
Patronage dividend receivable 1,167 1,728
Miscellaneous receivables 4,736 3,729
Other current assets 1,491 1,119
Total current assets 58,261 46,270
Property, equipment and fixtures,
net 78,460 75,307
Investment in related party,
at cost 10,951 10,698
Goodwill, net 11,032 11,287
Other intangibles, net 1,586 1,776
Other assets 5,039 4,217
TOTAL ASSETS $ 165,329 $149,555
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Current portion of long-term
debt $ 1,713 $ 2,149
Accounts payable to related
party 24,006 27,086
Accounts payable and accrued
expenses 22,027 23,496
Income taxes payable - 736
Total current liabilities 47,746 53,467
Long-term debt, less current
portion 42,939 27,204
Deferred income taxes 2,307 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 57,961 52,409
Less cost of treasury shares
(346,100 shares at April 29, 2000
and 368,300 shares at July 31, 1999) (4,788) (5,096)
Total shareholders' equity 72,337 66,477
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $165,329 $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 39 Wks. Ended 39 Wks. Ended
Apr. 29, 2000 Apr. 24, 1999 Apr. 29, 2000 Apr. 24, 1999
<S> <C> <C> <C> <C>
Sales $ 193,655 $ 182,096 $ 599,749 $ 552,788
Cost of sales 143,712 135,282 443,576 411,808
Gross margin 49,943 46,814 156,173 140,980
Operating and
administrative
expense 45,796 42,665 138,907 127,315
Depreciation and
amortization
expense 2,063 1,894 6,039 5,686
Operating income 2,084 2,255 11,227 7,979
Interest expense,
net 848 730 2,508 2,305
Gain on disposal
of assets 493 -- 493 --
Income before
income taxes 1,729 1,525 9,212 5,674
Provision for income
taxes 650 640 3,574 2,383
Net Income $ 1,079 $ 885 $ 5,638 $ 3,291
Net income
per share:
Basic $ .36 $ 30 $ 1.88 $ 1.11
Diluted $ .35 $ .29 $ 1.85 $ 1.08
</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 29, 2000 April 25, 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C>
Net income $ 5,638 $ 3,291
Adjustments to reconcile
net income to net cash
provided by
operating activities:
Depreciation and amortization 6,039 5,686
Deferred taxes ( 100) ( 225)
Provision to value inventories
at LIFO 250 400
Gain on disposal of assets ( 493) --
Changes in assets and
liabilities:
(Increase) in inventories ( 1,670) ( 2,224)
Decrease in patronage
dividend receivable 561 959
Increase) in miscellaneous
receivables ( 1,007) ( 164)
(Increase) in other current
assets ( 372) ( 339)
(Increase) in other assets ( 822) ( 398)
(Decrease) in accounts
payable to related party ( 3,080) ( 1,220)
Increase (decrease) in
accounts payable and accrued
expenses ( 1,469) 1,336
(Decrease) in income taxes
payable ( 736) ( 290)
Net cash provided by operating
activities 2,739 6,812
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures ( 9,116) ( 5,712)
Investment in related party ( 253) ( 104)
Proceeds from disposal
of assets 862 --
Net cash used by investing
activities ( 8,507) ( 5,816)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of
long-term debt 30,000 3,431
Proceeds from exercise of
stock options 222 97
Principal payments of
long-term debt (14,701) ( 2,464)
Net cash provided by
financing activities 15,521 1,064
NET INCREASE IN CASH AND
CASH EQUIVALENTS 9,753 2,060
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 9,771 5,679
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 19,524 $ 7,739
</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 consolidated financial position
as of April 29, 2000 and July 31, 1999 and the consolidated
results of operations and cash flows for the periods ended
April 29, 2000 and April 24, 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 April 29, 2000
are not necessarily indicative of the results to be expected
for the full year.
3. At both April 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 April 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 Wks Ended 39 Wks Ended
4/29/00 4/24/99 4/29/00 4/24/99
<S> <C> <C> <C> <C>
Weighted Average Shares
Outstanding - Basic 3,008,985 2,979,136 2,997,934 2,973,279
Dilutive Effect of
Employee Stock Options 46,040 56,971 50,168 70,900
Weighted Average Shares
Outstanding - Diluted 3,055,025 3,036,107 3,048,102 3,044,179
</TABLE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales in the third quarter of fiscal 2000 were $193,655,000,
an increase of 6.3% from the prior year. Same store sales
increased 1.4%. The remainder of the sales increase was due to
the acquisition of the Vineland store in May 1999. As disclosed
in prior filings, the same store sales increase for the third
quarter was below the trend for the first two quarters of fiscal
2000 due to competitive openings and comparisons to strong results
in the prior fiscal year. Sales for the nine month period were
$599,749,000, an increase of 8.5% from the prior year. Same store
sales for the nine month period increased 3.5%. Same store sales
for the nine month period include the benefit of 39 weeks of double
coupon promotions in northern New Jersey in fiscal 2000 compared
with 33 weeks in fiscal 1999. Same store sales increases for the
fourth quarter of fiscal 2000 are expected to be closer to the same
store sales increase achieved in the third quarter of fiscal 2000
than the higher same store sales results achieved in the first
half of the year.
Gross margin as a percentage of sales increased to 25.8% and
26.0%, respectively, in the quarter and nine month periods ended
April 29, 2000 compared with 25.7% and 25.5%, respectively, in
the corresponding prior year periods. 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 nine month periods were 23.6% and 23.2%,
respectively, compared with 23.4% and 23.0%, respectively, in the
corresponding prior year periods. The third quarter of fiscal
2000 includes a charge of approximately $350,000 to account for
the anticipated disposal of a store in the fourth quarter of
fiscal 2000. The nine month period of fiscal 2000 includes the
cost of doubling manufacturer's coupons for 39 weeks (and tripling
the cost of coupons to a limited extent for four weeks) compared to
33 weeks in the prior year. Both the quarter and nine month periods
of fiscal 2000 include improvements from lower payroll and fringe
benefit costs as a percentage of sales.
Depreciation and amortization expense increased in the third
quarter and nine month periods as a result of allocating the cost
of the fixed assets of the current West Orange store over their
reduced economic lives. The West Orange store will be replaced by
a new store on the same site sometime this summer.
Interest expense, net of interest income, increased for the
quarter and nine month period as a result of the $30 million private
placement closed in September 1999.
The results for the third quarter of fiscal 2000 include a gain
on the sale of real estate of a previously closed store in
Easton, PA. in the amount of $493,000.
Through planning initiatives implemented in fiscal 2000, the
Company reduced its effective income tax rate.
Net income increased 22% in the quarter to $1,079,000. This
increase is attributable to the slightly improved gross margin
percentage and the lower tax rate in the current year.
LIQUIDITY AND FINANCIAL RESOURCES
On September 16, 1999, the Company issued $30 million of 8.12%
unsecured Senior Notes. At the same time, the Company entered
into a $15 million unsecured revolving credit agreement. These
two debt agreements replaced the $6,667,000 term loan and a $24
million revolving credit facility, both of which were secured by
substantially all the Company's assets. The Company was in full
compliance with all terms and restrictive covenants of all debt
agreements at April 29, 2000.
Current assets exceeded current liabilities by $10,515,000 at
April 29, 2000 compared to current liabilities exceeding current
assets by $7,197,000 at July 31, 1999. The working capital ratio
increased to 1.22 at April 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 then
$14,701,000 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.
The Company currently plans to spend approximately $15 million
on capital expenditures in fiscal 2000. These 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 the cash on hand
from the financing described above. During the nine month
period, the Company had capital expenditures of $9,116,000.
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 June 1, 2000.
Exhibit 28(b)
Second Quarter Report to Shareholders
dated March 13, 2000.
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 1, 2000 /s/ Perry Sumas
Perry Sumas
(President)
Date: June 1, 2000 /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 29, 2000
Contact: Kevin Begley, C. F. O.
(973) 467-2200 - Ext. 220
Springfield, New Jersey - June 1, 2000 - Village Super Market,
Inc. reported sales and net income for the third quarter ended
April 29, 2000, Perry Sumas, President announced today.
Net income was $1,079,000 ($.35 per diluted share) in the third
quarter of fiscal 2000, an increase of 22% from the prior year.
Sales in the third quarter were $193,655,000, an increase of 6.3%
from the prior year. Same store sales increased 1.4% in the third
quarter. The remainder of the sales increase is due to the
acquisition of a store in May 1999. The improvement in third quarter
net income compared to the prior year is primarily a result of an
improved gross margin percentage and a lower effective tax rate.
For the nine month period, net income increased 71% to $5,638,000
($1.85 per diluted share). Sales were $599,749,000, an increase of
8.5% from the prior year. Same store sales increased 3.5%.
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 nine months
ended April 29, 2000:
<TABLE>
<CAPTION>
April 29, 2000 April 24, 1999
13 Weeks Ended
<S> <C> <C>
Sales $193,655,000 $182,096,000
Net Income $ 1,079,000 $ 885,000
Net Income Per Share - Basic $ .36 $ .30
Net Income Per Share - Diluted $ .35 $ .29
39 Weeks Ended
Sales $599,749,000 $552,788,000
Net Income $ 5,638,000 $ 3,291,000
Net Income Per Share - Basic $ 1.88 $ 1.11
Net Income Per share - Diluted $ 1.85 $ 1.08
</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)
To Our Shareholders:
S The Company had net income of $2,529,000 in the second quarter
ended January 29, 2000, an increase of 106% from the prior year.
E Sales in the second quarter were $210,681,000, an increase of
9.4% from the prior year. Same store sales increased 4.3%.
C The remainder of the sales increase was due to the acquisition
of the Vineland store in May 1999.
O
For the first six months of fiscal 2000, net income increased
N 89% to $4,559,000. Sales for the six month period were
$406,094,000, an increase of 9.6% from the prior year. Same
D store sales increased 4.6%. Same store sales for the remainder
of fiscal 2000 are expected to be below the current trend due
to competitive openings and comparisons to strong results in
Q fiscal 1999.
U Gross margin as a percentage of sales increased to 26.1% and
26.2%, respectively, in the quarter and six month periods ended
A January 29, 2000 compared with 25.5% and 25.4%, respectively,
in the corresponding prior year periods. Gross margin
R percentages improved in most selling departments, particularly
the grocery department.
T
Operating and administrative expenses as a percentage of sales
E for the quarter and six month periods were 22.8% and 22.9%,
respectively, compared with 23.0% and 22.8%, respectively, in
R 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.
R The six month period of fiscal 2000 includes 26 weeks of the
cost of doubling manufacturer coupons as compared to 20 weeks
E in the prior year.
P The net income increase of 106% in the quarter is primarily
attributable to the 4.3% same store sales increase and the
O substantially improved gross margin percentage.
The table accompanying this report summarizes Village Super
R Market's results for the quarter and six month periods ended
January 29, 2000:
T
Respectfully,
Perry Sumas James Sumas
President Chairman of the Board
March 13, 2000
<TABLE>
<CAPTION>
INCOME STATEMENT DATA
13 Wks Ended 13 Wks Ended
Jan 29, 2000 Jan 23, 1999
<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 Wks Ended 26 Wks Ended
Jan 29, 2000 Jan 23, 1999
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
BALANCE SHEET COMPARISONS
January 29, 2000 July 31, 1999
Current Assets $ 68,404,000 $ 46,270,000
Current Liabilities $ 54,849,000 $ 53,467,000
Net Working Capital (Deficit) $ 13,555,000 $ ( 7,197,000)
Long Term Debt $ 43,420,000 $ 27,204,000
Stockholders' Equity $ 71,138,000 $ 66,477,000
</TABLE>
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, results of litigation and other risk factors
detailed in the Company's filings with the SEC.
