-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KtkckeRQtFxIOXE4YNsZP4dP0iHRbkuD5QfJace3TQlxcMMqMe9TeD2lQ0uHHC4b /4EvLgGRfjGsHZbhERiskA== 0000103595-99-000005.txt : 19990303 0000103595-99-000005.hdr.sgml : 19990303 ACCESSION NUMBER: 0000103595-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990123 FILED AS OF DATE: 19990302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VILLAGE SUPER MARKET INC CENTRAL INDEX KEY: 0000103595 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 221576170 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-02633 FILM NUMBER: 99555289 BUSINESS ADDRESS: STREET 1: 733 MOUNTAIN AVE CITY: SPRINGFIELD STATE: NJ ZIP: 07081 BUSINESS PHONE: 2014672200 MAIL ADDRESS: STREET 1: 733 MOUNTAIN AVE CITY: SPRINGFIELD STATE: NJ ZIP: 07081 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended: January 23, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Commission File No. 0-2633 VILLAGE SUPER MARKET, INC. (Exact name of registrant as specified in its charter) NEW JERSEY 22-1576170 (State of other jurisdiction of incorporation (I. R. S. Employer or organization) Identification No.) 733 MOUNTAIN AVENUE, SPRINGFIELD, NEW JERSEY 07081 (Address of principal executive offices) (Zip Code) (973) 467-2200 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X_ No __ Indicate the number of shares outstanding of the issuer's classes of common stock as of the latest practicable date:
February 24, 1999 Class A Common Stock, No Par Value 1,380,500 Shares Class B Common Stock, No Par Value 1,594,076 Shares
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 7-10 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 Exhibit 28(a) 13 Exhibit 28(b) 14 PART I - FINANCIAL INFORMATION Item 1. Financial Statements
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) January 23, July 25, 1999 1998 ASSETS Current assets Cash and cash equivalents $ 12,023 $ 5,679 Merchandise inventories 29,229 26,549 Patronage dividend receivable 391 1,969 Miscellaneous receivables 4,353 3,416 Other current assets 773 778 Total current assets 46,769 38,391 Property, equipment and fixtures, net 74,120 73,331 Investment in related party 10,494 10,468 Goodwill, net 9,939 10,073 Other intangibles, net 1,903 2,030 Other assets 4,601 4,215 TOTAL ASSETS $147,826 $138,508 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 2,017 $ 2,830 Accounts payable to related party 29,784 27,370 Accounts payable and accrued expenses 20,197 17,583 Income taxes payable 371 290 Total current liabilities 52,369 48,073 Long-term debt, less current portion 28,419 25,700 Deferred income taxes 3,017 3,167 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 50,147 47,759 Less cost of treasury shares (382,300 shares at January 23, 1999 and 387,000 shares at July 25, 1998) (5,290) (5,355) Total shareholders' equity 64,021 61,568 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $147,826 $138,508
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Amounts) 13 Wks End 13 Wks End 26 Wks End 26 Wks End Jan 23,1999 Jan 24,1998 Jan 23,1999 Jan 24,1998 Sales $ 192,633 $ 182,700 $ 370,692 $ 352,588 Cost of sales 143,585 137,623 276,526 265,399 Gross margin 49,048 45,077 94,166 87,189 Operating and administrative expense 44,276 40,500 84,650 79,222 Depreciation and amortization expense 1,863 1,791 3,792 3,556 Operating income 2,909 2,786 5,724 4,411 Interest expense 796 808 1,575 1,617 Income before income taxes 2,113 1,978 4,149 2,794 Provision for income taxes 888 851 1,743 1,202 Net Income $ 1,225 $ 1,127 $ 2,406 $ 1,592 Net income per share: Basic $ .41 $ .38 $ .81 $ .54 Diluted $ .40 $ .38 $ .79 $ .54
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Dollars in Thousands) 26 Wks Ended 26 Wks Ended Jan. 23, 1999 Jan. 24, 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,406 $ 1,592 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,792 3,556 Deferred taxes ( 150) ( 300) Provision to value inventories at LIFO 250 225 Changes in assets and liabilities: (Increase) in inventory ( 2,930) ( 745) Decrease in patronage dividend receivable 1,578 1,511 (Increase) in misc. receivables ( 937) ( 875) (Increase) decrease in other current assets 5 ( 9) (Increase) in other assets ( 386) ( 28) Increase in accounts payable to related party 2,414 2,330 Increase in accounts payable and accrued expenses 2,614 919 Increase (decrease) in income taxes payable 81 ( 218) Net cash provided by operating activities 8,737 7,958 CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures ( 4,320) (4,430) Investment in related party ( 26) ( 58) Net cash used by investing activities ( 4,346) (4,488) CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 3,931 1,000 Proceeds from exercise of stock options (4,700 in 1999 and 60,000 in 1998) 47 480 Principal payments of long-term debt ( 2,025) (3,583) Net cash provided (used) by financing activities 1,953 (2,103) NET INCREASE IN CASH AND CASH EQUIVALENTS 6,344 1,367 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,679 4,270 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 12,023 $ 5,637
See accompanying Notes to Consolidated Condensed Financial Statements. VILLAGE SUPER MARKET, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the financial position as of January 23, 1999 and July 25, 1998 and the results of operations and cash flows for the periods ended January 23, 1999 and January 24, 1998. The significant accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the July 25, 1998 Village Super Market, Inc. Annual Report. 2. The results of operations for the period ended January 23, 1999 are not necessarily indicative of the results to be expected for the full year. 3. At both January 23, 1999 and July 25, 1998 approximately 66% 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 $7,965,000 and $7,715,000 higher than reported at January 23, 1999 and July 25, 1998, respectively. 4. During fiscal 1998, the Company adopted SFAS No. 128, "Earnings Per Share." This statement requires the presentation of both basic and diluted net income per share. The number of common shares outstanding for calculation of net income per share is as follows:
13 Wks Ended 26 Wks Ended 1/23/99 1/24/98 1/23/99 1/24/98 Weighted Average Shares Outstanding - Basic 2,970,824 2,949,810 2,970,350 2,929,843 Dilutive Effect of Employee Stock Options 68,418 9,040 77,864 11,854 Weighted Average Shares Outstanding - Diluted 3,039,242 2,958,850 3,048,214 2,941,697
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales in the second quarter of fiscal 1999 were $192,633,000, which represents a same store sales increase of 5.4% from the prior year. Sales for the six month period were $370,692,000, a same store sales increase of 5.1%. This acceleration in same store sales growth for the quarter and six month period is a result of the introduction of double coupons in northern New Jersey during the current fiscal year. On September 6, 1998, the Company, as well as most supermarket competitors, began offering to double the value of manufacturer coupons in the 16 stores in northern New Jersey where it previously had not been doubled. Gross margin as a percentage of sales increased to 25.5% and 25.4%, respectively, in the quarter and six month periods ended January 23, 1999 compared with 24.7% in both the quarter and six month periods of fiscal 1998. Gross margin percentages improved in most selling departments when compared to the prior year. This is in part due to a reduction in sale item penetration as a result of offering double coupons. Operating and administrative expenses as a percentage of sales for the quarter and six months increased to 23.0% and 22.8%, respectively, compared with 22.2% and 22.5%, respectively, in the corresponding prior year periods. These increases are a result of increased costs associated with double couponing and other promotional activities in the current quarter. Net income increased 8.7% in the quarter to $1,225,000. This increase is primarily attributable to the 5.4% same store sales increase and the substantially improved gross margin percentage, offset by the increase in costs resulting from double couponing and other marketing efforts. LIQUIDITY AND FINANCIAL RESOURCES Current liabilities exceeded current assets by $5,600,000 at January 23, 1999 compared to $9,682,000 at July 25, 1998. The current ratio increased to .89 at January 23, 1999 from .80 at July 25, 1998. The Company's working capital needs are reduced by its high rate of inventory turnover and because the warehousing and distribution arrangements accorded to the Company as a member of Wakefern permit it to minimize inventory levels and sell most merchandise before payment is required. During the six month period, $3,900,000 of additional borrowings and $8,700,000 of cash provided by operations were used to fund capital expenditures of $4,300,000 and to make principal payments on long term debt of $2,000,000. In addition, cash increased $6,300,000 in the six month period. The majority of capital expenditures in the six month period related to the expansion and remodel of the Livingston store, which is substantially complete. At January 23, 1999, $10,000,000 was outstanding of the Company's total available credit facility of $24,000,000. The Company was in full compliance with all terms and restrictive covenants of all debt agreements at January 23, 1999. YEAR 2000: The Company is participating with Wakefern Food Corporation ("Wakefern"), the retailer owned food cooperative to which it belongs and its principal supplier, in a comprehensive assessment of its information technology systems ("IT Systems") and its process control and other systems that include micro-controllers ("Non-IT Systems") to identify the systems that could be affected by the Year 2000 ("Y2K") issue. The Company and Wakefern have assessed all systems for Y2K readiness, giving the highest priority to those IT Systems that are considered critical to its business operations. At present, the Company has implemented its cash and sales, payroll, general ledger and accounts payable applications. Some in-store IT Systems are currently Y2K compliant. Others, including receiving, labor management, pharmacy and electronic payments, are at various stages of implementation or testing. The Company anticipates that all critical IT Systems will be Y2K complaint before the end of 1999. The Company has substantially completed an inventory of its Non-IT Systems, which includes those systems containing embedded chip technology commonly found in buildings and equipment connected with a building's infrastructure. The systems have been prioritized and assessed for compliance. Ongoing testing and implementation of any remediation required for the Non-IT Systems will be performed throughout 1999. The Company and Wakefern are utilizing the necessary internal and external resources to replace, upgrade or modify all significant systems affected by Y2K. The total estimated costs to remediate the Y2K issue will not have a significant adverse affect on continuing operations. All YK2 costs are being expensed as incurred. The Company is in the process of developing contingency plans for those areas which may be affected by Y2K. Although the full consequences are unknown, the failure of either the Company's critical systems or those of its material third parties, including Wakefern, to be Y2K compliant could result in the interruption of its business, which could have a material adverse affect on the results of operations or financial condition of the Company. 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, Y2K issues relating to computer applications, 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 February 26, 1999. Exhibit 28 (b)- First Quarter Report to Shareholders dated December 11, 1998. 6 (b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Village Super Market, Inc. Registrant Date: February 26, 1999 /s/ Perry Sumas Perry Sumas (President) Date: February 26, 1999 /s/ Kevin R. Begley Kevin R. Begley (Chief Financial Officer) Exhibit 28(a) VILLAGE SUPER MARKET, INC. REPORTS RESULTS FOR THE QUARTER AND SIX MONTHS ENDED JANUARY 23, 1999 Contact: Kevin Begley, C. F. O. (973) 467-2200 - Ext. 220 Springfield, New Jersey - February 26, 1999 - Village Super Market, Inc. reported sales and net income for the second quarter ended January 23, 1999, Perry Sumas, President announced today. Net income was $1,225,000 ($.40 per diluted share) in the second quarter of fiscal 1999, an increase of 9% from the prior year. Sales in the second quarter were $192,633,000, a same store sales increase of 5.4%. Sales increased above the previous trend primarily due to the introduction of double coupons into northern New Jersey, where 16 of the Company's stores operate, in September 1998. Net income improved in the quarter due to the same stores sales increase and a substantial improvement in gross margin percentages, partially offset by increased costs from the doubling of manufacturer coupons and other promotional activities. For the six month period, sales were $370,692,000, an increase of 5.1% from the prior year. Net income for the six month period was $2,406,000 ($.79 per share), an increase of 51% from the prior year. Village Super Market operates a chain of 22 supermarkets under the ShopRite name in New Jersey and eastern Pennsylvania. The following table summarizes Village's results for the quarter and six months ended January 23, 1999:
January 23, 1999 January 24, 1998 13 Weeks Ended Sales $192,633,000 $182,700,000 Net Income $ 1,225,000 $ 1,127,000 Net Income Per Share - Basic $ .41 $ .38 Net Income Per Share - Diluted $ .40 $ .38 26 Weeks Ended Sales $370,692,000 $352,588,000 Net Income $ 2,406,000 $ 1,592,000 Net Income Per Share - Basic $ .81 $ .54 Net Income Per share - Diluted $ .79 $ .54
Exhibit 28(b) F To Our Shareholders: I The Company had net income of $1,180,000 ($.39 per diluted share) in the first quarter ended October 24, 1998, an increase of 154% from the R prior year. The significant increase in net income was due to a strong increase in same store sales and substantially improved gross S margin percentages. T Sales in the first quarter were $178,058,000, a same store sales increase of 4.8%. This acceleration in same store sales growth above the recent trend is a result of the introduction of double coupons in northern New Jersey on September 6, 1998. Q Gross margin as a percentage of sales increased to 25.3% from 24.8% in the prior year. Gross margin percentages improved in most selling U departments. This is in part due to a reduction in sale item penetration as a result of offering double coupons. A Operating and administrative expenses as a percentage of sales declined R to 22.7% from 22.8% in the prior year. The improvement was primarily a result of the effect of spreading fixed costs over the much improved T sales base slightly exceeding the increased cost from the doubling of manufacturer coupons. E Capital expenditures in the quarter were $3,105,000. The majority of R capital expenditures in the quarter related to the expansion and remodel of the Livingston store, which is nearly complete. R The following table summarizes Village's results for the quarter ended October 24, 1998: E Respectfully, P Perry Sumas James Sumas President Chairman of the Board O R December 11, 1998 T
INCOME STATEMENT DATA 13 Wks Ended 13 Wks Ended Oct.24, 1998 Oct. 25, 1997 Sales $178,058,000 $169,888,000 Net Income $ 1,180,000 $ 465,000 Net Income Per Share - Basic $ .40 $ .16 Net Income Per Share - Diluted $ .39 $ .16 BALANCE SHEET COMPARISONS Oct. 24, 1998 July 25, 1998 Current Assets $ 41,826,000 $ 38,391,000 Current Liabilities $ 47,033,000 $ 48,073,000 Net Working Capital (Deficit) $( 5,207,000) $( 9,682,000) Long Term Debt $ 30,262,000 $ 25,700,000 Stockholders' Equity $ 62,748,000 $ 61,568,000
EX-27 2
5 1,000 6-MOS JUL-25-1998 JAN-23-1999 12023 0 4353 0 29229 46769 145200 71080 147826 52369 28419 19164 0 0 44857 147826 370692 370692 276526 276526 88442 0 1575 4149 1743 2406 0 0 0 2406 .81 .79
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