SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12,13 or 15(d) of
The Securities Exchange Act of 1934
FOODARAMA SUPERMARKETS, INC.
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned Registrant hereby amends
its Annual Report on Form 10-K for the fiscal year ended October 29, 1994
PART I
Item 1. Business.
The Registrant, a New Jersey corporation formed in 1958, operates a
chain of twenty supermarkets licensed as Shop-Rite, of which eighteen are
located in Central New Jersey and two in Pennsylvania, as well as, two
liquor
stores and two garden centers. The Registrant also operates a central
food processing facility to supply its stores with meat, various prepared
salads and other items, and a central baking facility which supplies its
stores with
bakery products.
The Registrant has introduced the concept of "World Class"
supermarkets into its operations. "World Class" supermarkets are
significantly larger than conventional supermarkets and feature fresh
fish-on-ice, prime meat service butcher departments, in-store bakeries,
international cheese cases, salad bars, snack bars, bulk foods and
pharmacies. The Registrant has also introduced many of these features
into its conventionally sized supermarkets
via extensive renovations; these stores are considered "Mini-World Class"
supermarkets. Currently, fourteen of the Registrant's stores are "World
Class", four are "Mini-World Class" and two are conventional
supermarkets.
On October 18, 1993, the Registrant sold its five New York stores
located in Long Island, New York to The Grand Union Company for $16.1
million plus inventory of $2.2 million. The net sales for these five
stores for the 50 weeks of fiscal 1993 during which they were owned by
the Registrant were $85 million. See Management's Discussion and Analysis
- - Results of Operations.
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The following table sets forth certain data relating to the
Registrant's business for the period indicated:
Stores in Operation throughout each Period
(dollars in thousands)
Number of Sales per Net Income
Stores Open Store Open Total Net (Loss) as
at End of Throughout Sales of Income Percent
Period Period (1) Period (2) all Stores (Loss) of Sales
53 weeks
ended
November
3, 1990 26 $25,889 $673,124 $1,048 .16
52 weeks
ended
November
2, 1991 27 $26,238 $695,306 $(553) (.08)
52 weeks
ended
October
31, 1992 26 $26,501 $695,157 $712 .10
52 weeks
ended
October
30, 1993 21 $28,375 $670,180 $(1,965) (.29)
52 weeks
ended
October
29, 1994 20 $30,025 $606,508 $(513) (.08)
(1) Stores in Stores Stores Stores in
Operation Opened or Closed or Operation
at beginning Acquired Sold During at end
of Period During Period Period of Period
1990 26 0 0 26
1991 26 1 0 27
1992 27 1 2 26
1993 26 1 6 21
1994 21 0 1 20
(2) Sales of stores open for the full fiscal year divided by number of stores
open the full fiscal year.
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Industry Segment and Principal Products. The Registrant is engaged
inone industry segment. For the last five fiscal years, the Registrant's sales
were divided approximately among the following items as follows:
Products
Groceries Dairy Deli- Liquor
(including catessen, Meats, Stores
Bakery and Frozen Seafood and
Non-Food Food and and Garden
Items) Appetizers Poultry Produce Centers
(-----------------------% of Total Sales---------------------)
53 weeks
ended
November
3, 1990 57.2 20.9 13.0 7.7 1.2
52 weeks
ended
November
2, 1991 58.2 20.5 12.3 7.6 1.3
52 weeks
ended
October
31, 1992 58.2 21.0 11.9 7.6 1.3
52 weeks
ended
October
30, 1993 57.7 20.9 12.0 8.0 1.4
52 weeks
ended
October
29, 1994 58.1 20.3 11.9 8.0 1.7
The foregoing sales breakdown is not necessarily indicative of the
relative portions of gross profit derived from each product category.
I-3
The Registrant has a 15% investment in Wakefern Food Corporation
("Wakefern"), a New Jersey corporation organized in 1946, which provides
purchasing, warehousing and distribution services on a cooperative basis
to its shareholder members, including the Registrant, who are operators
of ShopRite Supermarkets. Together, Wakefern and its shareholder members
operate
approximately 181 supermarkets. Purchases from Wakefern accounted for
approximately 85% of the Registrant's total purchases during the 52 weeks
ended October 29, 1994. Products bearing the ShopRite label accounted for
approximately 16% of total sales for the period. Wakefern maintains
warehouses in Elizabeth, Raritan and South Brunswick, New Jersey which
handle a full line of groceries, meats, seafood, frozen foods, produce,
bakery, dairy and delicatessen products and health and beauty aids, as
well as a number of non-food items. Wakefern also operates a grocery and
perishable products warehouse in Wallkill, New York.
Wakefern licenses the ShopRite name to its shareholder members and
provides a substantial and extensive merchandising development program
for the ShopRite label. The locations at which the Registrant may open
new supermarkets under the name ShopRite and the right to purchase
merchandise from Wakefern are subject to the approval of Wakefern's Site
Development Committee. Under circumstances specified in its By-Laws,
Wakefern may refuse to sell merchandise to, and may repurchase the
Wakefern stock of, any shareholder member. Such circumstances include
certain unapproved transfers of its supermarket business or its capital
stock in Wakefern, unapproved acquisition by a shareholder member of
certain supermarket or grocery wholesale supply businesses, the conduct
of a business in a manner contrary to the policies of Wakefern, the
material breach of any provision of Wakefern By-Laws or any agreement
with Wakefern or a determination by Wakefern that the continued supplying
of merchandise or services to such shareholder member would adversely
affect Wakefern.
In August 1994, Wakefern increased the amount each shareholder is
required to invest in Wakefern's capital stock to a maximum of $450,000 for
each store operated by such shareholder member. The precise amount of the
investment is computed according to a formula based on the volume of each
store's purchases from Wakefern. Wakefern's By-laws provide that no
shareholder member may withdraw all or substantially all of its or a
subsidiary's investments in Wakefern if such shareholder member, together
with its subsidiaries, has accounted for 10% or more of merchandise purchases
from Wakefern during the preceding Wakefern fiscal year, as does the
Registrant, unless such shareholder member gives Wakefern at least 30 days
notice thereof. Under its By-laws, all bills for merchandise and other
indebtedness are due and payable to Wakefern weekly and, in the event that
such bills are not paid in full, an additional 1% service charge is due on
the unpaid portion. Wakefern requires its shareholder members to pledge their
Wakefern stock certificates with it as collateral for payment of their
obligations to Wakefern. As of October 29, 1994, the Registrant's investment
in Wakefern was $8,427,000. The Company also has an investment in another
Company affiliated with Wakefern which was $788,000 at October 29, 1994 and
October 30, 1993. See Note 5 of Notes to Consolidated Financial Statements.
I-4
Since September 18, 1987, the Registrant has had an agreement with
Wakefern and all other shareholders of Wakefern, which provides for
certain commitments and restrictions on all shareholders of Wakefern.
Under the agreement, each shareholder, including the Registrant, agreed
to purchase at least 85% of its merchandise in certain defined product
categories from Wakefern. If any shareholder fails to meet such purchase
requirements, it must make payments to Wakefern (the "Compensatory
Payments") based on a formula designed to compensate Wakefern for the
profit lost by it by virtue of its lost warehouse volume. Similar
payments are due if Wakefern loses volume by reason of the sale of one or
more of a shareholder's stores or any shareholder's merger with another
entity. Subject to a right of first refusal granted to Wakefern, sales of
certain underfacilitated stores are permitted free of the restrictions of
the agreement. Also, the restrictions of the agreement do not apply if
volume lost by a shareholder by the sale of a store is made up by such
shareholder by increased volume of new or existing stores and, in any
event, the Compensatory Payments otherwise required to be made by the
shareholder to Wakefern are not required if the sale is made to Wakefern,
another shareholder of Wakefern or to a purchaser which is neither an
owner or operator of a chain of 25 or more supermarkets in the United
States, excluding any ShopRite supermarkets in any area in which Wakefern
operates. The agreement extends for an indefinite term and is subject to
termination ten years after the approval by a vote of 75% of the
outstanding voting stock of Wakefern.
The Registrant also purchases products and items sold in the
Registrant's supermarkets from a variety of sources other than Wakefern.
Neither the Registrant nor, to the best of the Registrant's knowledge,
Wakefern has experienced or anticipates experiencing any unique material
difficulties in procuring products and items in adequate quantities.
The supermarket business is highly competitive. The Registrant
competes directly with a number of national and regional chains,
including A&P,
Pathmark, Grand Union and Foodtown, as well as various local chains and
numerous single-unit stores. The Registrant has also had to compete with
the
"club" stores which have entered its markets. These stores charge a
membership fee, are non-unionized and operate larger units.
Many of the Registrant's competitors have greater financial resources and
sales. As most of the Registrant's competitors offer substantially the
same type of products, competition is based primarily upon price, and
particularly in the case of the meat, produce and delicatessen
departments, on quality. Competition is also based on service, the
location and appearance of stores and on promotion and advertising. The
supermarket business is characterized by narrow profit margins, and
accordingly, the Registrant's viability depends primarily on its ability
to maintain a relatively greater sales volume and efficient operations.
I-5
The Registrant's stores and facilities, in common with those of the
industry in general, are subject to numerous existing and proposed Federal,
State and local regulations which regulate the discharge of materials
into the environment or otherwise protect the environment, establish
occupational safety and health standards and cover other matters. The
Registrant believes its operations are in compliance with such existing
regulations and is of the opinion that compliance therewith has not had and
will not have any material adverse effect upon the Registrant's capital
expenditures, earnings or competitive position.
As of December 31, 1994, the registrant employed approximately 3,600
persons, of whom approximately 3,400 are covered by collective bargaining
agreements. The Registrant has historically maintained favorable relations
with its unionized employees; although, a strike of Retail Clerk Union
Local 1262 workers occurred in May 1993 against the Registrant and three
other New Jersey supermarket chains and continued for three weeks until it
was satisfactorily settled.
By virtue of the nature of supermarket operations, information
concerning backlog, patents, trademarks, licenses and concessions,
seasonality, major customers, government contracts, research and
development activities and foreign operations and export sales is not
relevant.
Item 2. Properties.
The Registrant's twenty supermarkets, nineteen of which are leased,
range in size from 26,000 to 101,000 square feet with sales area
averaging 75 percent of the total area. All stores are air-conditioned,
have modern fixtures and equipment and all have their own ample parking
facilities and are located in suburban areas.
The leases expire on various dates from 1995 through 2020. One lease
expires September 1995 and one lease expires September 1999, neither of
which contain a renewal clause. All other leases contain renewal options
ranging from 5 to 25 years. Five leases require, in addition to a fixed
rental, a further rental payment based on a percentage of the annual sales
in excess of a stipulated minimum. Most leases also require the registrant
to pay for insurance and any increase in real estate taxes. Certain fixtures
and equipment in Registrant's stores are subject to leases.
The Registrant also is subject to an additional fourteen leases
relating to locations where the Registrant no longer conducts supermarket
operations; eleven of such locations have been sublet to non-affiliated
persons, including four stores sold to The Grand Union Company. Although The
Grand Union Company is in bankruptcy proceedings and one store has been
closed, the Registrant's does not anticipate any material financial impact.
In most instances these stores have been sublet at terms at least
substantially equivalent to the Registrant's obligations under its prime
lease. In addition, the Registrant also is subject to a lease covering
its executive and principal administrative offices containing
approximately 14,000 square feet in Howell, New Jersey. The Registrant
also leases 40,000 square feet of space used for its bakery operations
and storage in Howell, New Jersey and owns and leases meat and prepared
foods processing facilities in Linden, New Jersey.
I-6
An additional lease has been signed for a replacement supermarket
location scheduled to open during fiscal year 1996.
Item 3. Legal Proceedings.
There are no material legal proceedings involving the Registrant.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
I-7
Part II
Item 5. Market for Registrant's Common Stock and Related Security Holder
Matters.
(a) The Registrant's Common Stock is traded on the American Stock
Exchange. The following table sets forth the high and low sales prices
for the Common Stock as reported on the American Stock Exchange for the
fiscal years ended October 30, 1993 and October 29, 1994.
Fiscal Quarter Ended High Low
January 30, 1993 16 7/8 15
May 1, 1993 15 3/4 14 3/4
July 31, 1993 15 1/8 14 1/2
October 30, 1993 15 3/8 14 1/4
January 29, 1994 15 1/8 13 3/4
April 30, 1994 14 12 1/8
July 30, 1994 13 7/8 10 1/2
October 29, 1994 12 1/4 11
(b) The approximate number of record holders of the Registrant's
Common Stock was 500 as of January 31, 1995.
(c) No dividends have been declared or paid with respect to the
Registrant's Common Stock since October 1979. The Registrant is
prohibited from paying dividends on its Common Stock unless it is current in
payment of dividends on its Preferred Stock (See Management's Discussion and
Analysis - Liquidity and Capital Resources). The Company has no intention
of paying dividends on its Common Stock in the foreseeable future. In
addition, the credit and term loan agreement among the Registrant and
certain bank and institutional lenders and the terms of the Preferred Stock
held by Wakefern contain limitations on the payment of cash dividends.
Item 6. Selected Financial Data.
The selected financial data set forth below is derived from the
Registrant's consolidated financial statements and should be read in
conjunction with the consolidated financial statements and related notes
included elsewhere in this Annual Report. Refer to Note 1 to the
consolidated financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations for a
discussion of the Registrant's financial condition.
II-1
Year Ended
October 29, October 30, October 31, November 2, November
3,
1994 1993 (2) 1992 1991 1990*
(Dollars in thousands, except per share amounts)
Income Statement
data:
Sales $ 606,508 $670,180 $695,157 $695,306 $673,124
Net (loss) income $ (513) $ (1,965) $ 712 $ (553) $ 1,048
(Loss) Earnings per
common share $ (.58) $ (1.84) $ .64 $ (.49) $ .94
Cash dividends
per common share - - - - -
Balance sheet data
(at year end):
Working capital
(Deficiency) $ (8,674) $ (30,613)(3)$ 13,169 $ 16,786 $ 14,053
Total assets $ 130,821 $ 137,440 $ 152,493 $145,057 $146,782
Long-term debt
(excluding current
portion) $ 37,439 $ 13,432 (1)$ 63,519 $ 68,743 $ 68,562
Common share-
holders' equity $ 28,984 $ 30,182 $ 32,147 $ 31,435 $ 32,042
Book value per
common share $ 25.92 $ 27.00 $ 28.75 $ 28.12 $ 28.35
* 53 weeks
(1) Does not include $32.6 million of long-term debt at October 30, 1993
reclassified as current due to default under the old Credit Agreements.
See Management's Discussion and Analysis of Financial Condition and
Liquidity. Such long-term debt has been classified as a current
liability on the Registrant's balance sheet as of that date.
(2) The period presented includes the results of operations of the five New
York stores for the 50 weeks prior to their sale on October 18, 1993.
(3) Includes $32.6 million of long term debt at October 30, 1993 reclassified
as current.
II-2
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FINANCIAL CONDITION AND LIQUIDITY
As reported in the Registrant's press release issued on February 16,
1995, the Company's refinancing package with NatWest Bank N.A. has been
successfully concluded.
The total debt facility of $38 million is comprised of $2 million due in
six months, $8.5 million due in one year, $12.5 million due in quarterly
installments commencing March 31, 1996 thru December 1998 and a $15
million Revolving credit note. The $2 million and $8.5 million loans are
expected to be repaid from sales of assets and equipment refinancing. The
financing is secured by substantially all of the Registrant's assets.
A total of $33.2 million of outstanding principal as of February 15, 1995
due the Registrant's existing lenders plus a $1.1 million prepayment
penalty and accrued interest of $500,000 was paid at closing. The
Registrant also paid a $925,000 facility fee to the new lenders plus a
$150,000 annual administrative fee. The Registrant is also required to
pay an additional facility fee of $75,000 one year after the closing.
The Registrant drew down a total of $33.1 million leaving a maximum
availability of $4.9 million at closing.
The Registrant had been in default under its credit agreements with its
institutional lenders since July 31, 1993 which continued through the
refinancing on February 15, 1995.
As a result of the refinancing, the Registrant's financial statements as
of October 29, 1994 (as amended) have reclassified this debt according to
the original payment schedule whereas as of October 30, 1993, the
Registrant classified the entire outstanding balance of $32,629,000 as a
current liability.
On February 16, 1993, in order to partially fund capital expenditures
made in fiscal 1992 and also to induce the senior lenders to amend the loan
agreements as aforesaid, the Registrant sold to Wakefern Food Corporation
136,000 shares of a duly authorized Class A 8% Cumulative Convertible
Preferred Stock (the "Preferred Stock") par value $12.50 per share, for
$1.7 million, the aggregate par value of such shares. The Preferred Stock
bears a preferential cumulative dividend at the rate of 8% per annum for
three years, increasing at the rate of 2% per annum each 12 months
thereafter.
II-3
The Preferred Stock is redeemable by the Registrant in whole or in part
at any time and must be redeemed by the earlier of (i) June 8, 1999, (ii)
consummation of the sale of all or substantially all of the Registrant's
assets or upon entering into the first of a related series of
transactions for the purpose of selling all or substantially all of the
Registrant's assets, (iii) the changing of shares of the common stock of
the Registrant into, or the exchange of such shares for, the securities
of any other corporation, or (iv) a "Change of Control" (as such term is
defined in Article Fifth of the Registrant's Certificate of
Incorporation) of its equity voting securities by way of merger,
consolidation or otherwise. The Preferred Stock is convertible at any
time after March 31, 1996 into shares of the common stock of the
Registrant at the then market value of such shares at a conversion value
of $12.50 per share of Preferred Stock but with the provision that no
more than 1,381,840 shares (representing the total of the Registrant's
unissued and treasury shares) may be issued on conversion of all of the
Preferred Stock. The amended loan agreements provide that dividends can
be paid and shares repurchased (or redeemed) only out of 25% of net
income for the most recently completed fiscal year, and then only if
certain financial covenants are met. As of October 29, 1994, there was no
availability under these provisions. It is, however, the Registrant's
intention to redeem the Preferred Stock prior to March 31, 1996.
No cash dividends have been paid since 1979, and the Registrant has no
present intentions or ability to pay any dividends in the near future.
Working Capital:
During fiscal 1994 $2.8 million of additional collateral was advanced for
worker's compensation insurance, $1.2 million was expended for financial
advisory services and fiscal 1995 debt service requirements are $3.9
million greater than fiscal 1994 all causing a working capital deficiency
as of October 29, 1994. The new revolving credit facility will provide
the necessary future working capital.
As a result of covenant violations under agreements with its senior lenders,
the Registrant has classified total debt due such lenders as a current
liability of $32,629,000 as of October 30, 1993.
Such reclassification has caused a working capital deficiency of
$30,613,000 as of October 30, 1993. At October 31, 1992, the Registrant
had positive working capital of $13,169,000.
Working capital ratios were as follows:
October 29, 1994 .8 to 1.0
October 30, 1993 .6 to 1.0
October 31, 1992 1.3 to 1.0
Cash flows (in millions) were as follows:
1994 1993 1992
From operations.......................... $ 9.2 $ 8.5 $ 14.5
Investing activities.................... (5.1) 5.6 (10.6)
Financing activities.................... (3.3) (17.7) ( 3.1)
Totals $ 0.8 $(3.6) $ 0.8
II-4
Fiscal 1994 capital expenditures totaled $5,709,000 with depreciation of
$9,183,000 compared to $9,260,000 and $10,251,000 respectively for fiscal 1993
and $10,579,000 and $10,370,000 respectively for fiscal 1992. In fiscal 1994
the Registrant reduced its funded debt by $3.3 million.
During fiscal 1993, the Registrant paid down $17.4 million of its debt to its
senior lenders of which $10.5 million represented proceeds from the sale
of its New York stores, and also paid $5.7 million on other debt. In
fiscal 1992 $7.1 million was paid while $4 million was borrowed. The
Registrant has no available lines of credit.
RESULTS OF OPERATIONS
Sales:
The Company's sales were $606.5 million, $670.2 million and $695.2
million, in fiscal 1994, 1993 and 1992 respectively. This represents a
decrease of 9.5 percent in 1994 and 3.6 percent in 1993. These decreases
are a result of the closing of one store in June 1994, the sale of five New
York stores in October 1993 and the closing of a store in March, 1992. In
addition, a strike by the New Jersey retail clerks union adversely affected
fifteen of the Company's stores in May 1993. Sales for the 20 stores open
during all of the last three fiscal years, including replacement stores,
totaled $600.5 million, $574.4 million and $588.7 million, respectively.
Comparable store sales were $558.3 million, $555.6 million and $572.9 million
in the respective three year periods.
Fiscal Years Ended
10/29/94 10/30/93 10/31/92
(in millions)
Stores open all periods............... $600.5 $574.4 $588.7
Stores closed or sold................. 6.0 95.8 106.5
$606.5 $670.2 $695.2
Gross Profit:
Gross profit totaled $149.9 million in fiscal 1994 compared to $159.9
million in fiscal 1993 and $176.0 million in fiscal 1992. Gross profit as a
percent of sales was 24.7%, 23.9% and 25.3%, respectively, in fiscal 1994,
1993 and 1992.
Fiscal 1994 was negatively impacted by a major reduction in inventory
levels and curtailment of buying programs undertaken to improve liquidity.
Fiscal 1993 was severely impacted by the New Jersey Clerks Union strike in
May 1993 which changed consumer buying habits coupled with an increase in
pilferage. Additionally, the delayed closing on the sale of the New York
stores finalized on October 18, 1993 instead of August 31, 1993, as
expected, caused a further decline in gross profit of approximately
$1.5 million.
II-5
Patronage dividends applied as a reduction of the cost of merchandise
sold were $7,745,000, $8,047,000 and $6,923,000 for the last three fiscal
years. This translates to 1.28%, 1.20% and 1.00% of sales for the respective
periods.
Fiscal Years Ended
10/29/94 10/30/93 10/31/92
(in millions)
Gross .............................$ 149.9 $ 159.9 $ 176.0
Gross margin...................... 24.7% 23.9% 25.3%
Store Operating, General and Administrative Expenses:
Fiscal 1994 expenses totaled $146.5 million compared to $167.5 million in
fiscal 1993 and $167.9 million in fiscal 1992.
Fiscal Years Ended
10/29/94 10/30/93 10/31/92
(in millions)
Sales.............................................. $606.5 $670.2 $695.2
Store Operating, General and Administrative Expenses. 146.5 167.5 167.9
% of Sales .......................................... 24.2% 25.0% 24.2%
The New York division's expenses totaled $21.3 million in fiscal 1993 and $21.8
million in fiscal 1992.
Fiscal 1994 includes $420,000 of pre-opening costs.
Non recurring items in fiscal 1993 include a reserve for future rent
payments on three closed properties and the write off of equipment in closed
stores totaling $900,000, a bad debt reserve and write down of joint venture
operations of $600,000 and strike related costs of $500,000. Also
included in fiscal 1993, are pre-opening costs of $1,100,000.
In fiscal 1992, pre-opening costs totaled $400,000.
Interest Expense:
Interest expense totaled $5.2 million in fiscal 1994 compared to $6.7
million in fiscal 1993 and $7.4 million in fiscal 1992. The decrease in fiscal
1994 and 1993 resulted from an overall reduction in debt levels coupled with
lower rates on the Registrant's bank credit facility. Interest income was $0.6
million in fiscal 1994 compared to $0.2 million in fiscal 1993 and $0.5
million in fiscal 1992. The current year includes $.04 million accrued on
prior years' tax refunds due to the Registrant.
Income Taxes:
Fiscal 1994 resulted in a tax benefit of $0.2 million versus $0.9 million in
fiscal 1993 and a tax expense of $0.5 million for fiscal 1992. See footnote 13
to financial statement for fiscal 1994 regarding unused tax credits and net
operating loss carryforwards available. The Financial Accounting Standards
Board issued SFAS No. 109 (which supersedes Statement No. 96) "Accounting for
Income Taxes", which required the Registrant to change its method of
accounting for income taxes which was adopted in the Registrant's first
quarter of fiscal 1994 and had no material effect.
II-6
Net Income:
Fiscal 1994 resulted in a net loss of $513,000 or $.58 per share after a net
gain of $.25 per share on real estate transactions.
The Registrant sold its five store New York Division on October 18, 1993,
which generated a net profit of $11,199,000 or $10.01 per share. Due to
the elongated closing process, the division suffered excessive operating
losses estimated at $2.7 million in the quarter ended October 30, 1993.
The strike by the Retail Clerks Union in May 1993, affecting 15 of the
Registrant's New Jersey stores, took its toll on lost sales and gross
profits and added additional costs as noted in discussions above. The
Registrant's two Pennsylvania stores were also adversely affected by
reason of media coverage of the strike.
Fiscal 1993 produced a net loss of $1,965,000 or $(1.84) per share after
the gain in the sale of the NY Division compared to net income of
$712,000 or $.64 per share for fiscal 1992. Shares outstanding were
1,118,150 for all three years. Per share amounts for fiscal 1994 and 1993
are after preferred dividends of $136,000 and $97,000, respectively.
Item 8. Financial Statements and Supplementary Data.
See Consolidated Financial Statements and Schedules included in Part IV,
Item 14.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
II-7
Part III
Item 10. Directors and Executive Officers of the Registrant.
The information required in response to this item is contained in the
Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A under the caption "Directors and Executive Officers of the
Registrant" and such information is incorporated herein by reference.
Item 11. Executive Compensation.
The information required in response to this item is contained in
the Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A under the caption "Executive Compensation" and such
information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required in response to this item is contained in the
Registrant's definitive proxy statement to be filed pursuant to Regulation
14A under introductory paragraphs and under the captions
"Principal Shareholders" and "Election of Directors" and such information
is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information required in response to this item is contained in
the Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A under the caption "Executive Compensation - Certain
Transactions" and such information is incorporated herein by reference.
III-1
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
a. 1. Audited financial statements and Page No.
supplementary data
Independent Auditors' Report 1
Foodarama Supermarkets, Inc. and
Subsidiaries Consolidated Financial
Statements:
Balance Sheets as of October 29, 1994 2-3
and October 30, 1993.
Statements of Operations for each of the 4
fiscal years ended October 29, 1994,
October 30, 1993 and October 31, 1992.
Statements of Shareholders' Equity 5
for each of the fiscal years ended
October 29, 1994, October 30, 1993
and October 31, 1992.
Statements of Cash Flows for each of the 6
fiscal years ended October 29, 1994,
October 30, 1993 and October 31, 1992.
Notes to Consolidated Financial Statements 7 to 21
a.2. Financial Statement Schedules
Schedules have been omitted because they
are not applicable or the required information
is shown in the financial statements or
notes thereto.
b. Reports on Form 8-K
Report filed August 16, 1994 relating to
"Item 5, Other Events"
IV-1
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Foodarama Supermarkets, Inc.
Freehold, New Jersey
We have audited the accompanying consolidated balance sheets of Foodarama
Supermarkets, Inc. and Subsidiaries as of October 29, 1994 and October 30,
1993, and the related consolidated statements of operations, shareholders'
equity, and cash flows for each of the three fiscal years in the period ended
October 29, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Foodarama Supermarkets, Inc. and
Subsidiaries as of October 29, 1994 and October 30, 1993, and the results of
their operations and their cash flows for each of three fiscal years in the
period ended October 29, 1994 in conformity with generally accepted accounting
principles.
As discussed in Note 2 to the financial statements, effective October 31, 1993,
the Company changed its method of accounting for income taxes to conform with
Statement of Financial Accounting Standards No. 109.
/S/ Deloitte & Touche
Parsippany, New Jersey
February 15, 1995
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 29, 1994 AND OCTOBER 30, 1993
ASSETS 1994 1993
CURRENT ASSETS:
Cash and cash equivalents $ 5,542,000 $ 4,765,000
Merchandise inventories 29,800,000 33,983,000
Receivables and other current assets 6,276,000 9,275,000
Patronage dividend receivable 3,717,000 4,648,000
Total current assets 45,335,000 52,671,000
PROPERTY AND EQUIPMENT:
Land 1,762,000 1,762,000
Buildings and improvements 2,132,000 2,132,000
Leaseholds and leasehold improvements 33,146,000 31,732,000
Equipment 50,860,000 48,042,000
Property and equipment under capital leases 16,789,000 18,508,000
104,689,000 102,176,000
Less accumulated depreciation and amortization 45,612,000 39,474,000
59,077,000 62,702,000
OTHER ASSETS:
Investments in related parties 9,215,000 8,626,000
Intangibles 7,508,000 8,145,000
Other 9,686,000 5,296,000
26,409,000 22,067,000
$130,821,000 $137,440,000
(Continued)
See notes to consolidated financial statements.
-2-
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 29, 1994 AND OCTOBER 30, 1993
LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1993
CURRENT LIABILITIES:
Current portion of long-term debt $10,830,000 4,309,000
Current portion of long-term debt, related party 349,000 204,000
Long-term obligations in default classified
as current - 32,629,000
Current portion of obligations under
capital leases 813,000 1,245,000
Current income taxes payable 245,000 546,000
Deferred income tax liability 2,010,000 -
Accounts payable:
Related party 20,538,000 21,286,000
Others 11,005,000 12,112,000
Accrued expenses 8,219,000 10,953,000
Total current liabilities 54,009,000 83,284,000
LONG-TERM DEBT 27,817,000 3,587,000
LONG-TERM DEBT, RELATED PARTY 767,000 176,000
OBLIGATIONS UNDER CAPITAL LEASES 8,855,000 9,669,000
DEFERRED INCOME TAXES 2,730,000 4,921,000
OTHER LONG-TERM LIABILITIES 5,959,000 3,921,000
Total long-term liabilities 46,128,000 22,274,000
MANDATORY REDEEMABLE PREFERRED STOCK,
$12.50 par; authorized 1,000,000 shares;
issued 136,000 shares 1,700,000 1,700,000
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par; authorized 2,500,000 shares;
issued 1,621,627 shares 1,622,000 1,622,000
Capital in excess of par 2,351,000 2,351,000
Retained earnings 32,318,000 32,831,000
Minimum pension liability adjustment (685,000) -
35,606,000 36,804,000
Less 503,477 shares, held in treasury, at cost 6,622,000 6,622,000
28,984,000 30,182,000
$130,821,000$137,440,000
See notes to consolidated financial statements.
-3-
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL YEARS ENDED OCTOBER 29, 1994, OCTOBER 30, 1993 AND OCTOBER 31, 1992
1994 1993 1992
SALES $606,508,000 $670,180,000 $695,157,000
COST OF MERCHANDISE SOLD 456,634,000 510,276,000 519,193,000
Gross profit 149,874,000 159,904,000 175,964,000
STORE OPERATING, GENERAL AND
ADMINISTRATIVE EXPENSES 146,451,000 167,482,000 167,860,000
INCOME (LOSS) FROM OPERATIONS 3,423,000 (7,578,000) 8,104,000
OTHER (EXPENSE) INCOME:
Gain on the sale of stores 549,000 11,199,000 -
Interest expense (5,217,000) (6,698,000) (7,368,000)
Interest income 551,000 219,000 492,000
(4,117,000) 4,720,000 (6,876,000)
(LOSS) INCOME BEFORE TAXES (694,000) (2,858,000) 1,228,000
INCOME TAX BENEFIT (PROVISION) 181,000 893,000 (516,000)
NET (LOSS) INCOME $(513,000) $(1,965,000) $712,000
(LOSS) INCOME PER COMMON SHARE $ (.58) $(1.84) $ .64
See notes to consolidated financial statements.
-4-
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FISCAL YEARS ENDED OCTOBER 29, 1994, OCTOBER 30, 1993 AND OCTOBER 31, 1992
1994 1993 1992
Common Stock:
Shares 1,621,627 1,621,627 1,621,627
Amount $1,622,000 $1,622,000 $1,622,000
Capital in Excess of Par 2,351,000 2,351,000 2,351,000
Retained Earnings (beginning) 32,831,000 34,796,000 34,084,000
Net (loss) income
1994 (513,000) - -
1993 - (1,965,000) -
1992 - 712,000
Retained Earnings (ending) 32,318,000 32,831,000 34,796,000
Minimum Pension Liability (685,000) - -
Treasury Stock
Shares (503,447) (503,477) (503,477)
Amount (6,622,000) (6,622,000) (6,622,000)
TOTALS $28,984,000 $30,182,000 $32,127,000
-5-
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FISCAL YEARS ENDED OCTOBER 29, 1994, OCTOBER 30, 1993 AND OCTOBER 31, 1992
1994 1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $(513,000) $(1,965,000) $ 712,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 9,183,000 10,251,000 10,370,000
Amortization, intangibles 637,000 1,564,000 1,499,000
Amortization, deferred financing costs 521,000 523,000 459,000
Amortization, escalation rents 640,000 551,000 537,000
Amortization, other assets 538,000 805,000 256,000
Gain on store divestitures (549,000) (11,199,000) -
Deferred income taxes (181,000) (1,647,000) 16,000
Loss on disposal of store property and
equipment and other assets 140,000 667,000 111,000
Changes in assets and liabilities:
Decrease (increase) in inventories 4,183,000 5,601,000 (2,244,000)
Decrease (increase) in receivables
and other assets 3,370,000 147,000 (1,053,000)
(Increase) decrease in other assets (5,468,000) 332,000 (3,638,000)
Decrease (increase) in patronage
dividend 931,000 (926,000) 1,015,000
(Decrease)increase in accounts payable (2,036,000) 5,100,000 5,804,000
(Decrease)increase income taxes payable (301,000) 42,000 500,000
(Decrease)increase in other liabilities (1,840,000) (927,000) 750,000
Other - (362,000) (574,000)
Net cash provided by operating activity 9,255,000 8,557,000 14,520,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from the sale of property
and equipment 30,000 - -
Net proceeds from the sale of stores 549,000 14,827,000 -
Purchase of property and equipment (5,709,000) (9,260,000) (10,579,000)
Net cash (used in) provided by
investing activities (5,130,000) 5,567,000 (10,579,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of redeemable preferred stock - 1,700,000 -
Proceeds from issuance of debt - 2,000,000 3,998,000
Principal payments under long-term debt(2,102,000) (19,579,000) (5,030,000)
Principal payments under capital lease
obligations (1,246,000) (1,828,000) (2,100,000)
Net cash used in financing activities (3,348,000) (17,707,000) (3,132,000)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 777,000 (3,583,000) 809,000
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 4,765,000 8,348,000 7,539,000
CASH AND CASH EQUIVALENTS, END OF YEAR $5,542,000 $4,765,000 $8,348,000
See notes to consolidated financial statements.
-6-
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DEBT REFINANCING
On February 15, 1995, the Company entered into a Revolving Credit and Term
Loan Agreement ("the Agreement") with a group of banks providing for a total
commitment of $38,000,000, secured by substantially all of the Company's
assets. The proceeds from this financing were utilized to repay the
Company's Senior notes and bank debt which at October 29, 1994 totaled
$34,883,000 and to provide for a working capital facility to fund future
operations and to expenditures, as necessary. The Company was in default
under the old loan agreements at October 29, 1994 and October 30, 1993.
The Agreement consist of three Term Loans (A, B, and C) and a Revolving Note.
Term Loan A totals $2,000,000, bears interest at 2% over prime, and is due
within six months from closing. Term Loan B totals $8,500,000, bears interest at
2% over prime and is due within 1 year from closing. Term Loans A and B are
expected to be repaid from asset sales or equipment refinancing. Term Loan C
totals $12,500,000 and bears interest at 2% over prime until Term Loans A and B
are repaid, at which time interest is reduced to 1.25% over prime. Term Loan C
is payable in quarterly installments commencing March 31, 1996 thru December
31, 1998. The Revolving Note, with a total availability of $15,000,000 bears
interest at 1.5% over prime until Term Loans A and B are repaid, at which time
interest is reduced to 1% over prime. A commitment fee of 1/2 of 1 percent is
charged on the unused portion of the Revolving Note.
Pursuant to the provisions of the existing loan agreements, the Company is
required to pay a special premium totaling $1,100,000. Additionally, the
Company is required to pay the new lenders a facility fee of $1,000,000 and
an annual administrative fee of $150,000. The Company expects to record a
write off of approximately $1,600,000 in the second quarter of 1995 on the
early extinguishment of debt.
The Agreement contains certain affirmative and negative covenants which, among
other matters will, (i) restrict capital expenditures, (ii) require the
maintenance of certain levels of net worth and earnings before interest, taxes,
depreciation and amortization, and maintenance of (iii) fixed charge coverage
and total liabilities to net worth ratios. The Company expects to be in
compliance with such covenants through fiscal 1995.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year - The Company's fiscal year ends on the Saturday closest to
October 31. Fiscal 1994, 1993 and 1992 consist of the 52 weeks ended October
29, 1994, October 30, 1993 and October 31, 1992, respectively.
Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its subsidiaries. All significant intercompany
accounts and transactions have been eliminated. The Company operates in one
industry segment, the sale of retail food and non-food products.
Reclassifications - Certain reclassifications have been made to prior years'
financial statements in order to conform to the current year presentation.
-7-
Cash Equivalents - The Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be cash equivalents.
Merchandise Inventories - Merchandise inventories are stated at the lower of
cost (first-in, first-out) or market with cost being determined under the
retail method.
Property and Equipment - Property and equipment is stated at cost and is
depreciated on a straight-line basis for financial reporting purposes over the
estimated useful lives of between three and ten years for equipment, ten years
or the lease term for leasehold and leasehold improvements, whichever is shorter
and twenty years for buildings.
Property and equipment under capital leases are recorded at the lower of fair
market value or the net present value of the minimum lease payments.
Investments - The Company's investment in its principal supplier, Wakefern
Food Corporation ("Wakefern"), is stated at cost (see Note 5).
Goodwill - Goodwill resulted partly from acquisitions prior to November 1,
1970 which were accounted for as purchases. To the extent that there is
continuing value, the Company is not amortizing this excess cost. The balance of
goodwill resulted from the acquisition of assets during fiscal 1989, and is
amortized on a straight-line basis over periods from 15 to 36 years.
Management assesses the recoverability of goodwill by comparing the Company's
forecast of cash flows from future operating results, on an undiscounted basis,
to the unamortized balance of goodwill at each balance sheet date. Cash flows
from operating results represent net income excluding depreciation and
amortization expense. If the results of such comparison indicate that an
impairment may be likely, the Company will recognize a charge to operations at
that time based upon the difference between the present value of the expected
cash flow from future operating results (utilizing a discount rate equal to
the Company's average cost of funds at the time), and the balance sheet value
of goodwill as of such time. The recoverability of goodwill is at risk to the
extent the Company is unable to achieve its forecast assumptions regarding
cash flows from operating results. Management believes, at this time, that the
goodwill carrying value and useful life continues to be appropriate.
Favorable Operating Leases - This amount is amortized on a straight-line basis
over the remaining terms of the related leases for periods from 14 to 32 years.
Covenant not to compete - This amount is amortized on a straight-line basis
over the contractual life of the agreements of 6 years.
Deferred Financing Costs - Deferred financing costs are being amortized over
the life of the related debt on a straight-line basis.
Income Taxes - Effective October 31, 1993, the Company adopted Statement of
Financial Accounting Standards (SFAS) No 109 "Accounting for Income Taxes",
which requires an asset and liability approach for accounting for income taxes.
Deferred taxes have been recorded for the differences between the financial
reporting and tax bases of the Company's assets and liabilities.
-8-
Preopening Costs - Costs associated with the opening of new stores are
amortized over a period of twelve months commencing one month after the
opening of the store.
Store Closing Costs - The costs of closing, net of amounts expected to be
recovered, are expensed when a decision to close a store is made. Until a store
is closed operating results continue to be reported.
Supplemental Cash Flow Information - Cash payments for interest amounted to
approximately $5,316,000, $6,963,000 and $7,532,000 for the years ended October
29, 1994, October 30, 1993 and October 31, 1992, respectively. During the year
ended October 29, 1994 and October 30, 1993, the Company paid approximately
$175,000 and $600,000 in income taxes, respectively. Cash receipts from an
income tax refund totaled $547,000 for the year ended October 31, 1992.
Supplemental Disclosure of Noncash Investing and Financing Activities - Long-
term debt issued for acquisition of equipment totaled $264,000 and $997,000 for
the years ended October 30, 1993 and October 31, 1992, respectively. During
fiscal 1994, the Company's investment in Wakefern was increased by $589,000
net of a receivable for $371,000 which was recorded for the closed Kingston
location and notes payable were issued to Wakefern for $960,000 for the
increase in the store Investment Program. In fiscal 1993 the Company's
investment was reduced by $1,832,000 from the sale of six stores, offset by
an increase of $133,000 for a replacement store.
3. STORE DIVESTITURES
On September 2, 1994, the Company sold a leasehold interest in the Roxborough
location, which provided net proceeds of $549,000 and resulted in a pre tax
gain in a like amount.
On October 18, 1993, the Company sold certain assets of its five operating New
York stores to the Grand Union Company for $16,100,000 plus inventory
merchandise of approximately $2,200,000. (See Note 14 Commitments and
Contingencies).
This sale provided $14,827,000 of net proceeds and resulted in a gain of
$11,199,000, after deducting estimated N.Y. State Transfer Tax of $561,000 and
transaction expenses of $712,000.
Concurrent with this transaction, the Company repaid approximately $10,500,000
to its senior lenders and approximately $650,000 to pay off equipment leases.
Subsequent payments were also made for professional fees, severance payments and
trade vendors aggregating approximately $2,300,000.
Total net sales for these five stores for fiscal 1993 and 1992 were $85,000,000
(50 weeks), and $88,000,000, respectively. The Company incurred operating losses
related to these stores for fiscal years 1993 and 1992 of $3,813,000 and
$1,218,000, respectively.
On February 3, 1995, the Company sold an owned location in Neptune, New Jersey
which had been operated as a supermarket until September 1993. The sale
provided net proceeds of $949,000 and resulted in a gain of $566,000 to be
recorded in the second quarter of fiscal 1995.
-9-
4. MANDATORY REDEEMABLE PREFERRED STOCK
As of February 16, 1993, the Company received $1,700,000 for the Preferred
Stock issuance of 136,000 shares at $ 12.50 par value per share to Wakefern
Food Corporation. These securities were issued partially to fund capital
expenditures made in fiscal 1992 and to induce the senior lenders to enter
into the amended loan agreements referred to in Note 7 below.
Dividends on the Preferred Stock are cumulative, accrue at an annual rate of
8% for the first three years and increase by 2% per year thereafter until
redeemed, and are payable when and as declared by the Company's board of
directors. As of October 29, 1994, cumulative dividends on preferred shares
that have not been declared are in arrears to the amount of approximately
$233,000. The Preferred Stock is redeemable on June 8, 1999, and is subject
to mandatory earlier redemption on the occurrence of certain events,
including a change of control, as defined, in the Company.
The Preferred Stock is convertible at any time after March 31, 1996 into shares
of the common stock of the Company at the then market value of such common
stock at a conversion value of $12.50 per share. The maximum number of common
shares which can be issued upon conversion is 1,381,850 shares (representing
the sum of all of the Company's unissued and treasury shares).
The loan agreement amendments referred to in Note 7 provide that dividends can
be paid and shares repurchased or redeemed only out of 25% of net income for
the most recently completed fiscal year, and then only if certain financial
covenants are met. Dividends can only be paid on the common stock if the
Company is then current with all preferred stock dividend payments. As of
October 29, 1994 there was no availability for payment of dividends.
5. RELATED PARTY TRANSACTIONS
Wakefern Food Corporation - As required by Wakefern's by-law's, all members of
the cooperative are required to make an investment in the common stock of
Wakefern for each supermarket operated ("Store Investment Program"), with the
exact amount per store computed in accordance with a formula based on the
volume of each store's purchases from Wakefern. The maximum required
investment per store was $450,000 at October 29, 1994 and $400,000 at
October 30, 1993. The Company also has an investment in another Company
affiliated with Wakefern which was $788,000 at October 29, 1994 and
October 30, 1993.
The Company has a 15% investment in Wakefern of $8,427,000 at October 29, 1994
and $7,838,000 at October 30, 1993. Wakefern is operated on a cooperative
basis for its members. The shares of stock in Wakefern are assigned to and
held by Wakefern as collateral for any obligations due Wakefern. In addition,
the obligations to Wakefern are personally guaranteed by principal
officer/shareholders of the Company. As of October 29, 1994, the Company was
obligated to Wakefern for $939,750 for the increase in its required investment
(see Note 8 Long Term Debt, Related Party).
-10-
As a shareholder member of Wakefern, the Company earns a share of an annual
Wakefern patronage dividend. The dividend is based on the distribution of all
operating profits on a pro rata basis of member purchases from each
merchandising division. It is the Company's policy to accrue quarterly an
estimate of the annual patronage dividend. The Company reflects the patronage
dividend as a reduction of the cost of merchandise sold in the consolidated
statement of operations. For fiscal 1994, 1993 and 1992, the patronage
dividends were $7,745,000, $8,047,000 and $6,923,000, respectively.
At October 29, 1994 and October 30, 1993, the Company has current receivables
due from Wakefern for approximately $5,869,000 and $8,893,000, respectively,
and noncurrent receivables of approximately $826,000 and $88,000,
respectively, representing patronage dividends, vendor rebates, coupons and
other receivables in the ordinary course of business which have been included
in accounts receivable and other noncurrent assets.
In September 1987, the Company and all other stockholder members of Wakefern,
entered into an agreement with Wakefern which provides for certain commitments
and restrictions on all stockholder members of Wakefern through the year 2000.
Under the agreement, each shareholder, including the Company, agreed to
purchase at least 85% of its merchandise in certain defined product
categories from Wakefern and, if it fails to meet such requirements, to make
payments to Wakefern based on a formula designed to compensate Wakefern for
its lost profit. Similar payments are due if Wakefern loses volume by reason
of the sale of all of a stockholder's stores, merger with another entity or
on the sale of an individual store. Purchases from Wakefern for all periods
presented approximated 85% of total purchases. The Company's merchandise
purchases from Wakefern approximated $350,187,000, $446,650,000 and
$443,793,000 for the years ended October 29, 1994, October 30, 1993 and
October 31, 1992, respectively.
In addition to its investment in Wakefern, which carries only voting rights,
the Company's President serves as a member of Wakefern's Board of Directors
and its finance committee. Several of the Company's officers and employees
also hold positions on various Wakefern committees.
Other - The Company has receivables from related parties that include current
and former shareholders, officers and real estate partnerships. Approximately
$437,000 has been converted into notes bearing interest at 7% to 9%. These
receivables have been classified based upon the scheduled payment terms. The
remaining amounts are not due upon any specified date and do not bear
interest. The Company's management has classified these loans based upon
expected payment dates. At October 29, 1994 and October 30, 1993, $262,000
and $498,000, respectively, were included in receivables and $1,620,000 and
$717,000, respectively, were included in other noncurrent assets.
6. INTANGIBLE ASSETS
Intangible assets consist of the following: October 29, October 30,
1994 1993
Goodwill $ 4,298,000 $ 4,298,000
Covenant not to compete 5,951,000 5,951,000
Favorable operating leases 4,685,000 4,685,000
14,934,000 14,934,000
Less accumulated amortization 7,426,000 6,789,000
$ 7,508,000 $ 8,145,000
-11-
7. LONG-TERM DEBT
Debt consists of the following:
October 29, October 30,
1994 1993
12.40% senior secured notes $19,049,000 $19,195,000
Notes payable, banks 15,834,000 15,957,000
Notes and mortgages payable 3,096,000 3,760,000
Notes payable, covenant not to compete 668,000 1,613,000
38,647,000 40,525,000
Less current portion 10,830,000 36,938,000
$27,817,000 $3,587,000
In June 1989, the Company entered into a note purchase agreement with several
institutions providing for the purchase of $31,000,000 of the Company's 12.40%
senior secured notes (the "Senior Note Agreement"). These notes are secured by
the capital stock of the Company's subsidiaries. The amount outstanding is
payable in varying annual installments through June 1, 1999.
In March 1989, the Company entered into a long-term credit agreement with a
syndicate of banks for commitments totaling $65,000,000 (Notes payable, banks)
to be used for the acquisition of stores and to fund the Company's capital
expansion program. The interest rate on this bank debt is .75% over prime
(7.75% and 7.25% at October 29, 1994 and October 30, 1993, respectively.) The
Credit Agreement provides for a staged reduction of the commitment through
1996. The bank commitment was reduced by the $31,000,000 borrowing under the
Senior Note Agreement.
The Company's loan agreements contain certain affirmative and negative
covenants which, among other matters require the maintenance of minimum
levels of consolidated net worth, cash flows and limitations on the
incurrence of additional debt and capital expenditures.
As of October 29, 1994 and October 30, 1993, the Company was in violation of
certain financial covenants of these loan agreements. As of February 15, 1995
these notes were fully repaid as part of a refinancing (See Note 1 Debt
Refinancing). The outstanding balance at October 29, 1994 under the old loan
agreements has been classified according to the original payment schedule as
the Company has the ability and intent to refinance these borrowings on a
long term basis.
Property and equipment which cost approximately $7,500,000, is pledged as
collateral for certain notes and mortgages. These notes have interest rates
ranging from prime to 9.53%. The due dates range from December 1995 to October
2000.
-12-
On April 15, 1989, in connection with the acquisition of four supermarkets,
the Company issued notes in exchange for agreements not to compete. The notes
are payable in varying monthly installments through March 1996 including
interest of 11%.
Aggregate maturities of long-term debt are as follows:
Fiscal Year
1995 $10,830,000
1996 8,235,000
1997 12,277,000
1998 3,821,000
1999 3,330,000
Thereafter 154,000
8. LONG-TERM DEBT, RELATED PARTY
The Company is indebted for an investment in Wakefern and a Wakefern
affiliate. The debt is non-interest bearing and payable in scheduled
installments over a period of up to four years.
The aggregate maturities of these notes are as follows:
Fiscal Year
1995 $349,000
1996 348,000
1997 260,000
1998 159,000
9. LONG-TERM LEASES
Capital Leases - Property and equipment under capital leases consists of:
October 29, October 30,
1994 1993
Real estate $ 9,649,000 $ 9,649,000
Fixtures and equipment 7,140,000 8,859,000
16,789,000 18,508,000
Less accumulated amortization 9,780,000 8,984,000
$7,009,000 $9,524,000
-13-
The following is a schedule by year of future minimum lease payments under
capital leases, together with the present value of the net minimum lease
payments, as of October 29, 1994:
Fiscal Year
1995 $1,780,000
1996 1,657,000
1997 1,324,000
1998 1,239,000
1999 1,239,000
Thereafter 9,542,000
Total minimum lease payments 16,781,000
Less amount representing interest 7,113,000
Present value of net minimum
lease payments $9,668,000
Included in the above is a store leased from a partnership in which the
Company has a 40% limited partnership interest at an annual rental of
$506,000.
Description of Operating Leasing Arrangements - The Company is obligated under
operating leases for rent payments expiring at various dates through 2020.
Certain leases provide for the payment of additional rentals based on certain
escalation clauses. Under the majority of the leases, the Company has the
option to renew for additional terms at specified rentals.
Rental expense - Total rental expenses for all operating leases consist of:
Fiscal 1994 Fiscal 1993 Fiscal 1992
Land and buildings $10,265,000 $9,799,000 $8,622,000
Less subleases 1,986,000 1,188,000 1,256,000
$ 8,279,000 $8,611,000 $7,366,000
Operating Leases - The minimum rental commitments under all noncancellable
operating leases reduced by income from noncancellable subleases at
October 29, 1994 are as follows:
Income from
Fiscal Land and Noncancellable Net Rental
Year Buildings Subleases Commitment
1995 $ 10,001,000 $ 1,824,000 $ 8,177,000
1996 10,191,000 1,898,000 8,293,000
1997 10,421,000 1,832,000 8,589,000
1998 10,103,000 1,457,000 8,646,000
1999 9,973,000 987,000 8,986,000
Thereafter 99,980,000 1,152,000 98,828,000
$150,669,000 $ 9,150,000 $141,519,000
The Company is presently leasing one of its supermarkets, a garden center and
liquor store, from the president and chairman of the board, at an annual
aggregate rental of approximately $558,000.
-14-
10. ACCRUED EXPENSES
Accrued expenses consists of the following:
October 29, October 30,
1994 1993
Payroll & payroll related taxes $3,386,000 $3,547,000
Insurance 1,400,000 1,625,000
Sales, use and other taxes 869,000 1,010,000
Interest 738,000 1,858,000
Employee Benefits 601,000 648,000
Occupancy costs 545,000 967,000
Real estate taxes 322,000 305,000
Pension 306,000 351,000
Other 52,000 642,000
$8,219,000 $10,953,000
11. EMPLOYEE BENEFIT PLANS
Defined Benefit Plans - The Company sponsors two defined benefit pension plans
covering administrative personnel and members of one union. Employees covered
under the administrative pension benefit plan earn benefits based upon
percentages of annual compensation and may make voluntary contributions to the
plan. Employees covered under the union pension benefit plan earn benefits
based on a fixed amount for each year of service. The Company's funding
policy is to pay at least the minimum contribution required by the Employee
Retirement Income Security Act of 1974. The plans' assets consist primarily
of publicly traded stocks and fixed income securities. As of October 29, 1994
and October 30, 1993 the plans held $497,000 and $407,000 in common stock of
the Company.
Net pension expense consists of the following:
Fiscal 1994 Fiscal 1993 Fiscal 1992
Service cost - benefits earned
during the period$ 288,000 $306,000 $264,000
Interest cost on projected benefit
obligation 360,000 400,000 332,000
Actual return on plan assets 233,000 (127,000) (380,000)
Net amortization and deferral (425,000) (197,000) 118,000
Net pension cost $ 456,000 $382,000 $334,000
The following table sets forth the two pension plan's funded status and amounts
recognized in the Company's consolidated financial statements at
October 29, 1994 and October 30, 1993.
Actuarial present value of benefit obligations:
1994 1993
Vested benefits obligation $ 4,524,000 $4,417,000
Non-vested benefits obligation 72,000 112,000
Accumulated benefit obligations $ 4,596,000 $4,529,000
-15-
1994 1993
Projected benefit obligations $(5,508,000) $(5,504,000)
Plan assets at fair value 4,407,000 4,473,000
Projected benefit obligations in excess
of plan assets (1,101,000) (1,031,000)
Adjustment required to recognize minimum
liability (767,000) (126,000)
Unrecognized transition asset (60,000) (73,000)
Unrecognized prior service costs 82,000 91,000
Unrecognized loss from prior experience 1,657,000 1,594,000
(Accrued) prepaid pension cost $(189,000) $ 455,000
The discount rates used in determining the actuarial present value of the
projected benefit obligation ranged from 6.5% to 7%. The expected long-term
rates of return on plan assets ranged from 6.5% to 7%. The rate of increase in
future compensation levels was 4.0%.
At October 29, 1994, the accumulated benefit obligation exceeded the fair
value of the plans' assets. The provisions of SFAS 87, "Employers' Accounting
for Pensions," require recognition in the balance sheet of an additional
minimum liability and related intangible asset for pension plans with
accumulated benefits in excess of plan assets; any portion of such additional
liability which is in excess of the plan's prior service cost is reflected as
a direct charge to equity, net of related tax benefit. Accordingly, at
October 29, 1994, a liability of $767,000 is included in Other Long-Term
Liabilities, a prepaid pension cost of $578,000 is included in Receivables and
other Current Assets and an intangible asset equal to the prior service cost
of $82,000 is included in Other Assets, and a charge of $685,000 is reflected
as a Minimum Pension Liability Adjustment in stockholders' equity in the
Consolidated Balance Sheet.
Multi-Employer Plan - Health, welfare and retirement expense was approximately
$7,497,000 in fiscal 1994, $7,058,000 in fiscal 1993 and $7,514,000 in fiscal
1992 under plans covering union employees which are administered through the
unions involved. The Company could, under certain circumstances, be obligated
for unfunded vested retirement benefits of these union plans.
401(k) Savings Plan - The Company sponsors an employee 401(k) savings plan for
all non-union employees. Contributions to the plan are in the form of employee
salary deferrals.
Deferred Compensation Agreements - In December 1990, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards, No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions". This
new statement requires an accrual of postretirement benefits (such as health
benefits) during the years an employee provides services. The Company provides
certain current and former officers' with supplemental income payments and
limited medical benefits during retirement. The Company recorded an estimate
of future compensation payments to be made over the officers anticipated
period of active employment which amounted to $504,000 and $461,000 at
October 29, 1994 and October 30, 1993, respectively. The Company purchased
life insurance to partially fund this obligation. The participants have
agreed to certain non-compete arrangements, and provide continued service
availability for consulting services after retirement.
-16-
During November 1992, Statement of Financial Accounting Standards No. 112
"Employers' Accounting for Postemployment Benefits" was issued. SFAS No. 112
is effective for fiscal years beginning after December 15, 1993 and will
require the accrual for postemployment benefits provided to former or
inactive employees and the recognition of an obligation for these benefits.
The Company will adopt this statement during the first quarter of fiscal
1995. The Company is currently evaluating the effect of such adoption which
is not expected to have a material effect on the Company's financial
statements.
12. STOCK OPTIONS
In April 1987, the Company's shareholders approved a stock option plan which
provides for the granting of options to purchase 200,000 common shares until
1994, exercisable over a period of five years at prices not less than market
value at the date of grant. At October 30, 1993, no options had been granted
under this plan. At October 29, 1994, the plan terminated with no options
being granted.
13. INCOME TAXES
The income taxes (benefit) provision consists of the following:
Fiscal 1994 Fiscal 1993 Fiscal 1992
Federal:
Current $ 420,000 $ 354,000 $500,000
Deferred (608,500) (1,448,000) (35,700)
State and local:
Current - 400,000 -
Deferred 7,500 (199,000) 51,700
$ (181,000) $ (893,000) $ 516,000
Deferred income taxes result from temporary differences between the tax basis of
assets and liabilities and their reported value in the financial statements.
During fiscal 1993 and 1992, the deferred income tax provisions result
primarily from accelerated tax depreciation, differences in basis of assets
sold, bad debt, leasing, accrued expenses, net operating loss carry forwards
and alternative minimum tax credit carry forwards.
The following tabulations reconcile the federal statutory tax rate to the
effective rate:
Fiscal Fiscal Fiscal
1994 1993 1992
Tax (benefit) expense at the statutory rate (34.0)% (34.0)%
34.0%
State and local income taxes (benefit),
net of federal income tax - - 6.0
Goodwill amortization not deductible for
tax purposes 5.6 1.4 3.7
Other 2.3 1.4 (1.7)
Actual tax expense (benefit) (26.1)% (31.2)% 42.0%
-17-
The components of the net deferred assets and liabilities as of October 29,
1994 were as follows:
Current deferred tax assets:
Reserves $ 303,000
Other 19,000
$ 322,000
Current deferred tax liabilities:
Dividend receivable $(1,553,000)
Inventories (523,000)
Other (256,000)
$(2,332,000)
Deferred income tax liability $(2,010,000)
Non-Current deferred tax assets:
Federal loss carryforward $1,987,000
Alternative minimum tax credits 1,461,000
State loss carryforward 698,000
Other credits 809,000
Contribution carryover 479,000
Lease obligations 1,429,000
Other 1,266,000
8,129,000
Non-Current deferred tax liabilities:
Depreciation of fixed assets $8,328,000)
Pension obligations (437,000)
Other (2,094,000)
(10,859,000)
Deferred income taxes $ (2,730,000)
At October 29, 1994, the Company has unused regular tax net operating loss
carryforwards ("NOLs") of approximately $6,500,000 available to reduce future
regular taxable income which expire in the years 2006 through 2008.
-18-
Guarantees - The Company remains contingently liable under leases assumed by
third parties in the event of nonperformance by these assignees. As of October
29, 1994, the minimum annual rental under these leases amounted to
approximately $900,000, expiring at various dates through 2004. The Company
has not experienced and does not anticipate any material nonperformance by
these assignees. The Company is the guarantor of $2,600,000 of debt of a real
estate partnership.
Contingencies - The Company's general liability insurer can make premium calls
up to a maximum of 45% of premiums paid for the years ended December 1, 1992
thru December 1, 1994. Such a call could be approximately $750,000. Management
believes such a call is unlikely.
15. EARNINGS (LOSS) PER SHARE
The computation of earnings per share is based on the weighted average number
of common shares outstanding during each year (1,118,150 shares in 1994, 1993
and 1992) and mandatory preferred stock dividend requirements of $136,000 in
fiscal 1994 and $97,000 in fiscal 1993. Fully diluted net loss per share has
not been presented since the amount is antidilutive.
16. RECEIVABLES AND OTHER CURRENT ASSETS
Receivables and other current assets consists of the following:
October 29, October 30,
1994 1993
Account receivable $2,269,000 $3,220,000
Coupon receivable 1,779,000 3,436,000
Prepaids 757,000 569,000
Rent receivable 2,324,000 1,993,000
Tax refund receivable 698,000 1,308,000
Less allowance for uncollectable
accounts (1,551,000) (1,251,000)
$6,276,000 $9,275,000
17. OTHER ASSETS
Other assets consists of the following:
October 29, October 30,
1994 1993
Collateral for worker's compensation
insurance $3,698,000 $ 839,000
Deferred financing costs 1,685,000 671,000
Prepaids 1,322,000 1,511,000
Deposits 905,000 1,003,000
Other 2,076,000 1,272,000
$9,686,000 $5,296,000
-19-
18. OTHER LONG-TERM LIABILITIES
Other long-term liabilities consist of the following:
October 29, October 30,
1994 1993
Deferred escalation rent $3,857,000 $2,253,000
Pension liability 767,000 -
Deferred compensation 599,000 -
Other 736,000 1,668,000
$5,959,000 $3,921,000
19. UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY INFORMATION
Summarized quarterly information for the years ended October 29, 1994 and
October 30, 1993 as follows:
Thirteen Weeks Ended
January 29, April 30, July 30, October 29,
1994 1994 1994 1994
(Dollars in thousands, except per share data)
Sales $157,491 $151,546 $150,791 $146,680
Gross profit 38,702 36,133 38,406 36,633
Net income (loss) 40 (1,301) 384 364
Mandatory preferred stock
dividend requirement (34) (34) (34) (34)
Earnings (loss) available to
common stock 6 (1,335) 350 330
Earnings (loss) available per
common share .01 (1.19) .31 .29
The net loss in the second quarter of fiscal 1994 was primarily attributable
to the effects of an inventory reduction program under taken to improve
liquidity. Such program reduced inventory levels through price reductions
and manufacturer returns through the Company's reclamation program, reducing
overall gross margins. Sales and gross profit declines of 1.63% and .73%,
respectively, were the direct results of this program.
In the fourth quarter of fiscal 1994 $549,000 of pre tax income was
attributable to a gain on the sale of a leasehold interest.
-20-
Thirteen Weeks Ended
January 30, May 1, July 31, October 30,
1993 1993 1993 1993
(Dollars in thousands, except per share data)
Sales $172,719 $169,002 $167,679 $160,780
Gross profit 43,214 41,188 38,427 37,075
Net income (loss) 121 290 (3,671) 1,295
Mandatory preferred
stock dividend
requirement - (29) (34) (34)
Earnings (loss) available
to common stock 121 261 (3,705) 1,261
Earnings (loss) available
per common share .11 .23 (3.31) 1.13
During the third quarter of fiscal 1993, the net loss was primarily
attributable to a 22 day strike by the retail clerks union which
significantly reduced sales volume and gross profit margins at fifteen store
locations. In addition, the Company incurred approximately $500,000 in non
recurring operating expenses for strike costs such as additional security,
advertising, temporary workers, and overtime.
In the fourth quarter of fiscal 1993, net income was attributable to the net
gain of $11,199,000 related to the sale of the New York stores. This gain was
partially offset by the lingering effects of the strike, non recurring losses
for a reserve for future rent payments, the write-off of equipment related to
closed store locations totaling approximately $900,000 and a bad debt reserve
and write-down of investments in real estate joint ventures of approximately
$600,000.
******
-21-
c. Exhibits
3. Articles of Incorporation and By-Laws
*i. Restated Certificate of Incorporation of Registrant filed
with the Secretary of State of the State of New Jersey on
May 15, 1970.
*ii. Certificate of Merger filed with the Secretary of State of
the State of New Jersey on May 15, 1970.
*iii. Certificate of Merger filed with the Secretary of State of
the State of New Jersey on March 14, 1977.
*iv. Certificate of Merger filed with the Secretary of State of
the State of New Jersey on June 23, 1978.
*v. Certificate of Amendment to restated Certificate of
Incorporation filed with the Secretary of State of the
State of New Jersey on May 12, 1987.
* *vi. Certificate of Amendment to Restated Certificate of
Incorporation filed with the Secretary of State of the
State of New Jersey on February 16, 1993.
**vii. By-Laws of Registrant.
viii. Amendments to By-Laws of Registrant adopted September 14,
1983.
ix. Amendment to By-Laws of Registrant adopted March 15, 1991
is incorporated herein by reference to the Registrant's
Annual Report on Form 10-K for the year ended November 2,
1991 filed with the Securities and Exchange Commission on
February 18,1992.
_______________________________________________________________________________
* Each of these Exhibits is incorporated herein by reference to
the Registrant's Annual Report on Form 10-K for the year ended
October 29, 1988 filed with the Securities and Exchange
Commission on February 13, 1989.
** Each of these Exhibits is incorporated herein by reference to
the Registrant's Annual Report on Form 10-K for the year ended
October 31, 1992 filed with the Securities and Exchange
Commission on February 19, 1993.
IV-2
10. Material Contracts.
i. The Agreement dated September 18, 1987 entered into by
Wakefern Food Corporation and the Registrant is
incorporated herein by reference to Exhibit A to the
Registrant's Form 8-K filed with the Securities and
Exchange Commission on November 19, 1987.
***ii. Certificate of Incorporation of Wakefern Food corporation
together with amendments thereto and certificates of
merger.
***iii. By-Laws of Wakefern Food Corporation.
iv. Purchase Agreement, dated March 10, 1989, by and between
Hilltop Supermarkets, Inc. and the Registrant is
incorporated herein by reference to Exhibit (2) (I) to
the Registrant's Form 8-K filed with the Securities and
Exchange Commission on April 4, 1989.
v. Agreement, dated March 10, 1989, by and between Afta
Equipment Leasing Co., an affiliate of Hilltop
Supermarkets, Inc., and the Registrant is incorporated
herein by reference to Exhibit (2) (I) to the
Registrant's Form 8-K filed with the Securities and
Exchange Commission on April 4, 1989.
***vi. Agreements between the Registrant and the principals of
Hilltop Supermarkets, Inc.
***vii. Credit Agreement, dated as of March 16, 1989, among the
Registrant, each of the Banks which are a signatory thereto
and The Chase Manhattan Bank (National Association).
***viii. Amendment No.1 to the Credit Agreement, dated as of
June 16, 1989, among the Registrant, each of the Banks
which are a signatory thereto and The Chase Manhattan
Bank (National Association).
***ix. Note Purchase Agreements, dated as of June 1, 1989,
between the Registrant and various institutional Lenders.
_______________________________________________________________________________
*** Each of these Exhibits is incorporated herein by reference to the
Registrant's Annual Report on October 28, 1989 filed with the
Securities and Exchange Commission on February 9, 1990.
IV-3
***x. Letter Agreement, dated January 25, 1990, among the
Registrant, the Banks which are parties to the Credit
Agreement, dated as of March 16, 1989, and each of
institutional lenders who were issued senior secured
notes pursuant to the several Note Agreements, dated
as of June 1, 1989, between each such institutional
investors and the Registrant.
***xi. Form of Deferred Compensation Agreement, between the
Registrant and certain of its key employees.
xii. Registrant's 1987 Incentive Stock Option Plan is
incorporated herein by reference to Exhibit 4 (a) to
the Registrant's Form S-8 filed with the Securities
and Exchange Commission on May 26, 1989.
xiii. Amendment No. 2 to the Credit Agreement, dated as of January
25, 1990, among the Registrant, each of the Banks which are
a signatory thereto and The Chase Manhattan Bank (National
Association) is incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended
November 3, 1990 filed with the Securities and Exchange
Commission on February 20, 1991.
****xiv. Amendment No. 3 to the Credit Agreement, dated as of
February 5, 1992, among the Registrant, each of the Banks
which are a signatory thereto and The Chase Manhattan
Bank (National Association).
_______________________________________________________________________________
**** Each of these Exhibits is incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended
November 2, 1991, filed with the Securities and Exchange Commission
on February 18, 1992.
IV-4
**xv. Amendment No. 4 to the Credit Agreement, Dated as of
February 12, 1993, among the Registrant, each of the
Banks which are a signatory thereto and The Chase
Manhattan Bank (National Association).
****xvi. Modification Letter to Note Purchase Agreement, dated as
of June 1, 1989, between the Registrant and various
Institutional Lenders.
****xvii. Amendment Letter to Note Purchase Agreement, dated as of
August 10, 1989, between the Registrant and various
Institutional Lenders.
****xviii. Modification Letter to Note Purchase Agreement, dated as of
February 5, 1992, between the Registrant and various
Institutional Lenders.
**xix. Modification Letter to Note Purchase Agreement, dated as of
February 16, 1993, between the Registrant and various
Institutional Lenders.
*****xx. Agreement, dated September 20, 1993, between the Registrant,
ShopRite of Malverne, Inc. and The Grand Union Company.
_______________________________________________________________________________
***** Incorporated herein by reference to the Registrant's Annual
Report on Form 10-K for the year ended October 30, 1993,
filed with the Securities and Exchange Commission on February
24, 1994.
IV-5
Exhibit 21
LIST OF SUBSIDIARIES
OF FOODARAMA SUPERMARKETS, INC.
State of
Name of Subsidiary Incorporation
ShopRite of Malverne, Inc. New York
New Linden Price Rite, Inc. New Jersey
ShopRite of Reading, Inc. Pennsylvania
IV-6
Exhibit 99
FOR IMMEDIATE RELEASE
Freehold, N.J., February 16, 1995 -- Foodarama Supermarkets, Inc. (FSM:AMEX)
announced today that it had completed a refinancing of its outstanding
institutional indebtedness. The Company reported that it had entered into a
secured Revolving Credit and Term Loan Agreement with a group of banks headed
by NatWest Bank N.A. for a total commitment of $38 million. Of this $38
million, $23 million is in the form of various term loans maturing $2 million
in six months, $8.5 million in one year and $12.5 million payable in quarterly
installments commencing March 31, 1996 thru December 31, 1998. The balance of
$15 million is represented by a Revolving Note subject to a borrowing base
formula.
The Company reported that, in order to discharge its outstanding
indebtedness of $33.2 million it was obliged to pay a prepayment penalty of
$1.1 million, and that it had paid the new lenders a facility fee of
$1 million.
The Company stated that it had adopted a limited asset redeployment
program in order to meet the first two maturities of the term loans.
Mr. Joseph J. Saker, Chairman and Chief Executive Officer of the Company,
expressed satisfaction with the refinancing and stated that he believes it
restores the Company to a sound financial footing and paves the way for the
Company's return to normal operations after the difficulties of the last two
years.
IV-7
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FOODARAMA SUPERMARKETS, INC.
(Registrant)
/S/ Michael Shapiro
Michael Shapiro
(Chief Financial Officer)
/S/ Joseph C. Troilo
Joseph C. Troilo
(Chief Accounting Officer)
Date: March 3, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Name Title Date
/S/ Joseph J. Saker
Joseph J. Saker Chairman of the Board March 3, 1995
of Directors and President
(principal executive officer)
/S/ Arthur M. Borden
Arthur M. Borden Director March 3, 1995
/S/ John W. Hurley
John W. Hurley Director March 3, 1995
/S/ Richard Saker
Richard Saker Chief Operating Officer March 3, 1995
Secretary and Director
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