-----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, Ep+b5IOI3mtP6aI52JJPNM5G2QMsMBpKyl5futm9hWkfIAbjU5X37MDskQKcb1jr zPI8AYqML1zAlIvxzmUNPA== 0000103595-00-000016.txt : 20001208 0000103595-00-000016.hdr.sgml : 20001208 ACCESSION NUMBER: 0000103595-00-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001028 FILED AS OF DATE: 20001207 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: 784989 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 0001.txt 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: October 28, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Commission File No. 0-2633 VILLAGE SUPER MARKET, INC. (Exact name of registrant as specified in its charter) NEW JERSEY 22-1576170 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 733 MOUNTAIN AVENUE, SPRINGFIELD, NEW JERSEY 07081 (Address of principal executive offices) (Zip Code) (973) 467-2200 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X_ No Indicate the number of shares outstanding of the issuer's classes of common stock as of the latest practicable date:
December 4, 2000 Class A Common Stock, No Par Value 1,419,400 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 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 10 Exhibit 28(a) 11-12 Exhibit 28(b) 13-14 PART I - FINANCIAL INFORMATION Item 1. Financial Statements
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) October 28, July 29, 2000 2000 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 21,337 $ 25,721 Merchandise inventories 30,872 31,033 Patronage dividend receivable 3,600 2,201 Miscellaneous receivables 5,658 5,255 Other current assets 800 650 Total current assets 62,267 64,860 Property, equipment and fixtures, net 82,867 80,628 Investment in related party, at cost 11,189 11,051 Goodwill, net 10,861 10,946 Other intangibles, net 1,459 1,523 Other assets 4,792 4,916 TOTAL ASSETS $ 173,435 $ 173,924 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 1,693 $ 1,705 Accounts payable to related party 27,667 28,634 Accounts payable and accrued expenses 21,728 23,157 Income taxes payable 1,004 109 Total current liabilities 52,092 53,605 Long-term debt, less current portion 41,261 42,507 Deferred income taxes 2,710 2,660 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, issued & outstanding 1,594,076 shares 1,035 1,035 Retained earnings 62,959 60,739 Less cost of Class A treasury shares (343,400 shares at October 28, 2000 and July 29, 2000) (4,751) (4,751) Total shareholders' equity 77,372 75,152 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $173,435 $173,924
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Amounts) (Unaudited) 13 Weeks Ended 13 Weeks Ended October 28, 2000 October 30, 1999 Sales $ 198,033 $ 191,292 Cost of sales 150,014 144,202 Gross margin 48,019 47,090 Operating and administrative expense 41,837 40,959 Depreciation and amortization expense 1,954 1,914 Operating income 4,228 4,217 Interest expense, net 745 847 Income before provision for income taxes 3,483 3,370 Provision for income taxes 1,263 1,340 Net income $ 2,220 $ 2,030 Net income per share: Basic $ .74 $ .68 Diluted $ .73 $ .67
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Dollars in Thousands) (Unaudited) 13 Wks. Ended 13 Wks. Ended Oct. 28, 2000 Oct. 30, 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,220 $ 2,030 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 1,954 1,914 Deferred taxes 50 ( 100) Provision to value inventories at LIFO 100 150 Changes in assets and liabilities: (Increase) decrease in merchandise inventories 61 ( 870) (Increase) in patronage dividend receivable ( 1,399) ( 1,235) (Increase) in misc. receivables ( 403) ( 1,119) (Increase) in other current assets ( 150) ( 72) (Increase) decrease in other assets 124 ( 744) (Decrease) in accounts payable to related party ( 967) ( 1,077) (Decrease) in accounts payable and accrued expenses ( 1,090) ( 2,846) Increase in income taxes payable 895 924 Net cash provided by (used in) operating activities 1,395 ( 3,045) CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures ( 5,245) ( 1,353) Investment in related party ( 138) ( 85) Net cash used in investing activities ( 5,383) ( 1,438) CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt -- 30,000 Proceeds from exercise of stock options -- 22 Principal payments of long-term debt ( 396) ( 13,862) Net cash provided by (used in) financing activities ( 396) 16,160 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 4,384) 11,677 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 25,721 9,771 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 21,337 $ 21,448
See accompanying Notes to Consolidated Condensed Financial Statements. VILLAGE SUPER MARKET, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of October 28, 2000 and the consolidated results of operations and cash flows for the periods ended October 28, 2000 and October 30, 1999. The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July 29, 2000 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with this Form 10-Q. 2. The results of operations for the period ended October 28, 2000 are not necessarily indicative of the results to be expected for the full year. 3. At both October 28, 2000 and July 29, 2000, 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 $8,602,000 and $8,502,000 higher than reported at October 28, 2000 and July 29, 2000, respectively. 4. The number of common shares outstanding for calculation of net income per share is as follows:
October 28, October 30, 2000 1999 Weighted average shares outstanding - basic 3,013,476 2,989,831 Dilutive effect of employee stock option 34,516 56,697 Weighted average shares outstanding - diluted 3,047,992 3,046,528
5. At a recent FASB Emerging Issues Task Force meeting, a consensus was reached with respect to the issue "Accounting for Certain Sales Incentives" including point of sale coupons, rebates and free merchandise. The consensus included a conclusion that the value of such sales incentives that result in a reduction of the price paid by the customer should be netted against revenue and not classified as a marketing expense. The Company historically recorded coupons as operating and administrative expense. Effective with the first quarter of fiscal 2001, the Company has classified coupon expense a reduction of sales. Prior year amounts have been reclassified to conform to the current year presentation. Coupon expense for the quarter ended October 28, 2000 and October 30, 1999 was $4,187,000 and $4,125,000, respectively. This reclassification had no effect on the Company's net income. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales in the first quarter of fiscal 2001 were $198,033,000, an increase of 3.5% from the prior year. On August 10, 2000, the Company opened a 67,000 square foot store to replace its existing store in West Orange, New Jersey. Excluding this replacement store, sales increased 2.6% in the first quarter. Gross margin as a percentage of sales decreased to 24.2% from 24.6% in the prior year. Gross margin percentages declined in several departments compared to the prior year. Operating and administrative expenses as a percentage of sales decreased to 21.1% from 21.4% in the prior year. This decrease was a result of lower payroll, advertising and utility costs as a percentage of sales. These decreases were partially offset by increased occupancy costs. The Company reduced its effective income tax rate to 36.3%, compared to 39.8% in the prior fiscal year, through tax planning initiatives begun in the second half of fiscal 2000. Net income increased 9% in the quarter to $2,220,000. This increase is attributable to increased sales, lower operating expenses as a percentage of sales and a lower tax rate, offset by reduced gross margin percentages. As previously announced, the Company closed the South Orange, New Jersey store on October 28, 2000. LIQUIDITY AND FINANCIAL RESOURCES Current assets exceeded current liabilities by $10,175,000 at October 28, 2000 compared to $11,255,000 at July 29, 2000. The working capital ratio was 1.2 to 1 at both dates. 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 first quarter, the Company had capital expenditures of $5,245,000. The major expenditures were equipment and leasehold improvements for the replacement store in West Orange, New Jersey and remodel costs for the store in Vineland, New Jersey. The Company has budgeted approximately $16 million for capital expenditures in fiscal 2001. This amount includes the construction, which recently began, and equipment for a new superstore in Garwood, New Jersey. The Company's primary sources of liquidity in fiscal 2001 are expected to be cash on hand and operating cash flow. OTHER MATTERS On November 22, 2000, Big V Supermarkets, Inc., the largest member of the Wakefern Food cooperative, filed for reorganization under Chapter 11 of the U .S. Bankruptcy Code. In addition, Big V announced its intention to depart from the Wakefern cooperative. Separately, Wakefern has publicly stated that Wakefern will take all appropriate actions to enforce its rights under the Wakefern stockholder's agreement. The Company's Form 10-K includes a comprehensive description of the Company's relationship with Wakefern and the rights and obligations of the Company and other members under the Wakefern stockholder's agreement. Further, a press release issued by Wakefern in response to this situation is attached as Exhibit 28(b). At this time, any impact on Wakefern and the Company from these developments cannot be ascertained. 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, local economic conditions, competitive pressures from the Company's operating environment, the ability of the Company to maintain and improve its sales and margins, the ability to attract and retain qualified associates, the availability of new store locations, the liquidity of the Company on a cash flow basis, 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 December 1, 2000. Exhibit 28(b) - Wakefern Food Corporation press release dated November 24, 2000. 6(b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Village Super Market, Inc. Registrant Date: December 5, 2000 /s/ Perry Sumas Perry Sumas (President) Date: December 5, 2000 /s/ Kevin R. Begley Kevin R. Begley (Chief Financial Officer) Exhibit 28(a) VILLAGE SUPER MARKET, INC. REPORTS RESULTS FOR THE FIRST QUARTER ENDED OCTOBER 28, 2000 Contact: Kevin Begley, C.F.O. (973) 467-2200, Ext. 220 Springfield, New Jersey - December 1, 2000 - Village Super Market, Inc. (NSD - VLGEA) reported sales and net income for the first quarter ended October 28, 2000, Perry Sumas, President announced today. Net income was $2,220,000 ($.73 per diluted share) in the first quarter of fiscal 2001, an increase of 9% from the first quarter of the prior year. Sales in the first quarter were $198,033,000, an increase of 3.5% from the prior year. Excluding a replacement store that opened in West Orange, New Jersey on August 10, 2000, sales increased 2.6%. Net income increased due to higher sales, lower operating costs as a percentage of sales and a lower effective tax rate, partially offset by lower gross margin percentages. On November 22, 2000, Big V Supermarkets, Inc., the largest member of the Wakefern Food cooperative, filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code and announced its intention to depart the Wakefern cooperative. Separately, Wakefern has publicly stated that Wakefern will take all appropriate actions to enforce its rights under the Wakefern Stockholder's agreement. Village is a member of the Wakefern cooperative. The impact of Big V's actions on Wakefern and Village cannot be ascertained at this time. Village Super Market operates a chain of 22 supermarkets under the ShopRite name in New Jersey and eastern Pennsylvania. The following table summarizes the results for the quarter ended October 28, 2000:
13 Weeks Ended 13 Weeks Ended October 28, 2000 October 30, 1999 Sales $ 198,033,000 $ 191,292,000 Net Income $ 2,220,000 $ 2,030,000 Net Income Per Share - Basic $ .74 $ .68 Net Income Per Share - Diluted $ .73 $ .67
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, local economic conditions, competitive pressures from the Company's operating environment, the ability of the Company to maintain and improve its sales and margins, the ability to attract and retain qualified associates, the availability of new store locations, the liquidity of the Company on a cash flow basis, and other risk factors detailed herein and in the Company's filings with the SEC. Exhibit 28(b) 600 York St. Wakefern Food Corporation Elizabeth, NJ 07207 Press Release Contact: Mary Ellen Gowin 732-906-5150 FOR IMMEDIATE RELEASE November 24, 2000 WAKEFERN RESPONDS TO BIG V ACTION Elizabeth, New Jersey, November 24,2000...-- In Big V Supermarkets' 10Q filing with the United States Securities and Exchange Commission on November 20,2000, they announced that they had entered into a supply agreement with C&S Wholesale Grocers, Inc. for supplying their grocery, frozen, and perishable merchandise. Subsequent to that action, they announced that they had voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code and plan to close a number of stores. That bankruptcy filing relates only to Big V and does not implicate Wakefern or any other of its Members and or stores. "One of our greatest concerns is for the Associates who work for Big V and the Customers they serve. As well, we sincerely hope they will fulfill their obligations to their dedicated associates. Customers in that region have come to rely on the ShopRite brand and the quality and value it represents," stated Thomas P. Infusino, Chairman of the Board and CEO of Wakefern Food Corporation. Infusino also pointed out that Big V is party to an agreement with Wakefern that requires all Members of Wakefern to give notice if they decide to leave and to pay a substantial fee for the "loss-of-volume" to the cooperative. Mr. Infusino also added, "We assume that Big V will honor its contractual commitments to Wakefern. However, in the event that Big V does not comply with its obligations, Wakefern will take all appropriate actions to enforce its rights." In addition to the wholesale procurement and distribution services that Wakefern provides to its Membership, Wakefern also offers comprehensive services in the areas of store development, engineering, technology, loss prevention, quality assurance, product development, advertising, merchandising, consumer affairs and financial and accounting services, among others. "When utilized properly, these services have allowed our Membership to achieve unparalleled success while providing them substantial savings. It allows us to remain highly competitive and to focus our attention on servicing our customers," stated Mr. Infusino. Mr. Infusino also noted, "We have survived loss of volume before, and we will once again prove the power of the cooperative structure by recouping this volume over time." The 41 Members who independently own and operate ShopRite Supermarkets drive Wakefern's volume. While the largest member, Big V represents only 13% of Wakefern's volume. In 1967, Supermarkets General withdrew from the Cooperative to become Pathmark. At that time, their volume made up one-half of Wakefern's total volume. Although it was a major challenge, Wakefern Members made up that volume, resulting in the development of an even stronger commitment to the cooperative structure. The ShopRite organization is a very successful and stable company with a strong brand identity. Today, Wakefern is a 7 billion dollar company. ShopRite has been the recognized #1 market leader for many years. ShopRite Owners/Members are in the process of remodeling stores and building a substantial number of new stores, with many more under development. Our alternate format store, PriceRite , is extremely successful with 8 stores in Connecticut, Massachusetts and Rhode Island and has very aggressive growth plans in those areas. Wakefern Food Corporation is the largest Member-owned wholesale cooperative in the United States, providing distribution, products and services to its Members who own and operate 205 supermarkets in the North East. Stores are located in New Jersey, New York, Connecticut, Pennsylvania and Delaware, Rhode Island, and Massachusetts. EX-27 2 0002.txt
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