-----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, JmlRP+sAbdWlYs7p0aSIoYf38qbzgWfhi+iDDoJhsQmVJyfevzfk25ChH2hzhAzi uYKIRydtea7Nvyv9g4OfAw== 0000103595-02-000002.txt : 20020415 0000103595-02-000002.hdr.sgml : 20020415 ACCESSION NUMBER: 0000103595-02-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020126 FILED AS OF DATE: 20020306 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: 1934 Act SEC FILE NUMBER: 000-02633 FILM NUMBER: 02568408 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 village2.txt VILLAGE SUPER MARKET 2ND QTR 2002 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 26, 2002 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:
February 28, 2002 Class A Common Stock, No Par Value 1,463,500 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 - 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 10 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 11 Signatures 11 Exhibit 28(a) 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) January 26, July 28, 2002 2001 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 41,952 $ 31,156 Merchandise inventories 32,712 30,468 Patronage dividend receivable 316 2,145 Other current assets 5,512 5,274 ------- ------ Total current assets 80,492 69,043 Property, equipment and fixtures, net 93,639 86,508 Investment in related party, at cost 13,648 13,113 Goodwill, less accumulated amortization of $4,307 at July 28, 2001 10,605 10,605 Other assets 4,005 4,077 -------- -------- TOTAL ASSETS $202,389 $183,346 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 3,026 $ 2,727 Accounts payable to related party 35,195 28,364 Accounts payable and accrued expenses 23,948 20,865 ------ ------ Total current liabilities 62,169 51,956 Long-term debt 45,223 43,363 Other liabilities 3,604 3,257 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 76,370 70,116 Less cost of Class A treasury shares (299,300 shares at January 26, 2002 and 326,000 shares at July 28, 2001) (4,141) (4,510) ------ ------ Total shareholders' equity 91,393 84,770 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $202,389 $183,346 ======== ========
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 Wks. Ended 13 Wks. Ended 26 Wks. Ended 26 Wks. Ended Jan. 26, 2002 Jan. 27, 2001 Jan. 26, 2002 Jan. 27, 2001 Sales $ 230,636 $ 212,920 $ 441,468 $ 410,953 Cost of sales 173,100 161,986 331,415 312,100 ------- ------- ------- ------- Gross profit 57,536 50,934 110,053 98,853 Operating and administrative expense 48,988 44,116 94,175 85,853 Depreciation and amortization 1,921 1,959 3,758 3,913 Non-cash impairment charge --- --- 640 --- ------ ------ ------ ------ Operating income 6,627 4,859 11,480 9,087 Interest expense, net 843 809 1,488 1,554 ------ ------ ------ ------ Income before income taxes 5,784 4,050 9,992 7,533 Income taxes 2,060 1,468 3,647 2,731 ------- ------ ------ ------ Net income $ 3,724 $ 2,582 $ 6,345 $ 4,802 ========= ========= ========= ========= Net income per share: Basic $ 1.22 $ .86 $ 2.08 $ 1.59 Diluted $ 1.19 $ .84 $ 2.03 $ 1.57 ========= ========= ========= =========
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) 26 Wks Ended 26 Wks Ended Jan. 26, 2002 Jan. 27, 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,345 $ 4,802 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,758 3,913 Non-cash impairment charge 640 ---- Deferred taxes 150 100 Provision to value inventories at LIFO 400 275 Changes in assets and liabilities: (Increase) in merchandise inventories ( 2,644) ( 788) Decrease in patronage dividend receivable 1,829 1,540 (Increase) in other current assets ( 238) ( 330) (Increase) decrease in other assets 52 ( 221) Increase in accounts payable to related party 6,831 1,996 Increase in accounts payable and accrued expenses 3,083 542 Increase (decrease) in other liabilities 197 ( 109) ------- ------- Net cash provided by operating activities 20,403 11,720 CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (11,510) (7,582) ------- ------ Net cash used in investing activities (11,510) (7,582) CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 3,000 ------ Proceeds from exercise of stock options 278 23 Principal payments of long-term debt ( 1,375) ( 1,101) ------- ------- Net cash provided by (used in) financing activities 1,903 ( 1,078) NET INCREASE IN CASH AND CASH EQUIVALENTS 10,796 3,060 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 31,156 25,721 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 41,952 $ 28,781 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS FOR: Interest (net of amounts capitalized) $ 1,902 $ 2,101 Income taxes $ 3,276 $ 2,938 NON-CASH SUPPLEMENTAL DISCLOSURE: Investment in related party $ 550 -----
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 January 26, 2002 and the consolidated results of operations and cash flows for the periods ended January 26, 2002 and January 27, 2001. The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July 28, 2001 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 January 26, 2002 are not necessarily indicative of the results to be expected for the full year. 3. At both January 26, 2002 and July 28, 2001 approximately 65% 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 $9,709,000 and $9,309,000 higher than reported at January 26, 2002 and July 28, 2001, respectively. 4. The number of common shares outstanding for calculation of net income per share is as follows:
13 Wks Ended 26 Wks Ended 1/26/02 1/27/01 1/26/02 1/27/01 Weighted Average Shares Outstanding - Basic 3,050,598 3,014,125 3,044,040 3,013,801 Dilutive Effect of Employee Stock Options 81,395 47,852 76,423 41,184 --------- --------- --------- --------- Weighted Average Shares Outstanding - Diluted 3,131,993 3,061,977 3,120,463 3,054,985 ========= ========= ========= =========
5. ADOPTION OF NEW ACCOUNTING STANDARDS Effective July 29, 2001, the Company adopted the provisions of the Financial Accounting Standards Board's Statement No. 141, "Business Combinations", and Statement No. 142, "Goodwill and Other Intangible Assets". Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Statement 141 also specifies criteria that intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill. Statement 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually. Statement 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment. The initial implementation of Statement 141 and 142 did not have a material impact on the consolidated financial statements since there was no indication of goodwill impairment, and no reclassifications or changes to the useful lives of intangibles were deemed necessary. As of the date of adoption, the Company had unamortized goodwill in the amount of $10,605,000 and unamortized identifiable intangible assets in the amount of $200,000. Amortization expense related to goodwill was $341,000 for the year ended July 28, 2001. As a result of adopting Statement 142, the Company no longer amortizes goodwill. The Company's net income for the quarter and six months ended January 27, 2001 would have been $2,636,000 and $4,909,000, compared with $2,582,000 and $4,802,000 as previously reported had this amortization expense not been reported in those periods. The Company's basic and diluted earnings per share for the quarter ended January 27, 2001 would have been $.87 and $.86, compared with $.86 and $.84 as previously reported had this amortization expense not been reported in that period. The Company's basic and diluted earnings per share for the six months ended January 27, 2001 would have been $1.63 and $1.61, compared with $1.59 and $1.57 as previously reported had this amortization expense not been reported in that period. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales in the second quarter of fiscal 2002 were $230,636,000, an increase of 8.3% from the corresponding quarter in the prior year. On September 26, 2001, the Company opened a 59,000 square foot store in Garwood, NJ. Excluding the new Garwood store, same store sales increased 3.2%. Excluding the results of the replacement store in West Orange, which opened August 10, 2000, sales increased 2.0%. Sales increased 7.4% to $441,468,000 for the six month period of fiscal 2002 compared to the prior year. Excluding Garwood and a store closed one year ago, same store sales increased 4.5%. Gross profit as a percentage of sales increased to 24.9% in both the quarter and six month periods compared with 23.9% and 24.1%, respectively, in the corresponding prior year periods. Gross profit as a percentage of sales increased due to improved product mix, improved gross profit percentages in most departments, incentives received in connection with the new Garwood store and a decrease in promotional spending. Operating and administrative expenses as a percentage of sales increased to 21.2% and 21.3%, respectively, in the quarter and six month periods compared with 20.7% and 20.9%, respectively, in the corresponding prior year periods. These increases were primarily due to increases in fringe benefit costs. Depreciation and amortization expense declined in the first quarter and six month periods of fiscal 2002 compared to the prior year as the Company no longer amortizes goodwill in accordance with Statement 142. The Company recorded a non-cash impairment charge of $640,000 in the first quarter of fiscal 2002 to write off the book value of the equipment of the Ventnor store. The sublessor of this property rejected its lease in March 2001 pursuant to the U.S. Bankruptcy Code. Although the Company negotiated with the property owner to remain in this location under new lease terms, the Company's lease was terminated by the property owner. Therefore, the Ventnor store was closed on February 5, 2002. Net income was $3,724,000 in the second quarter of fiscal 2002, an increase of 44% from the prior year. This increase is attributable to substantial sales and gross profit percentage increases, partially offset by increased operating expenses. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $20,403,000 for the six months ended January 26, 2002 compared with $11,720,000 for the six month period ended January 27, 2001. The increase is due to increased accounts payable and accrued expenses and increased net income, partially offset by increased inventories. Both inventories and accounts payable increased due to the opening of the Garwood store. Accounts payable also increased due to construction of the Hammonton store and timing of payments to vendors. Working capital was $18,323,000 at January 26, 2002 compared to $17,087,000 at July 28, 2001. The working capital ratio was 1.29 to one at January 26, 2002 compared to 1.33 to one at July 28, 2001. The Company's working capital needs are reduced since inventories are generally sold by the time payments to Wakefern and other suppliers are due. During the six month period ended January 26, 2002, the Company had capital expenditures of $11,510,000. The major expenditures were the completion of construction and equipment for the new store in Garwood and the beginning of construction of a new store in Hammonton, NJ. The Company has budgeted approximately $20 million for capital expenditures in fiscal 2002. The Company's primary sources of liquidity are expected to be cash on hand, operating cash flow and equipment financing. During the second quarter of fiscal 2002, the Company borrowed $3,000,000 secured by the equipment of the Garwood store. 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. Wakefern has publicly stated that it 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. A recent decision by the U.S. Bankruptcy Court held that Big V would be required to pay a substantial withdrawal payment to Wakefern to make up for the loss of volume to the cooperative in the event Big V departs from the Wakefern Cooperative. Wakefern and Big V have recently filed a joint Plan of Reorganization pursuant to which Wakefern will purchase substantially all of Big V's assets. A competing supermarket chain is also seeking to purchase substantially the same assets through the Bankruptcy proceeding. Any sale of Big V's assets will require the approval of the Bankruptcy Court. The outcome of Big V's reorganization is uncertain. At this time, the ultimate impact, if any, on Wakefern and the Company from the Big V Bankruptcy proceedings cannot be ascertained, although any significant loss of volume from a termination of the Wakefern supply agreement by Big V, without payment of the aforementioned withdrawal payment, could result in increased costs to the Company for product purchases and services. FORWARD-LOOKING STATEMENTS: This Form 10-Q 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 availability of capital, 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 March 1, 2002. Exhibit 28(b) - First Quarter Report to Shareholders dated December 13 , 2001. 6 (b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Village Super Market, Inc. Registrant Date: March 4, 2002 /s/ Perry Sumas Perry Sumas (President) Date: March 4, 2002 /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 26, 2002 Contact: Kevin Begley, C. F. O. (973) 467-2200 - Ext. 220 Springfield, New Jersey - March 1, 2002 - Village Super Market, Inc. (NSD-VLGEA) reported sales and net income for the second quarter ended January 26, 2002, Perry Sumas, President announced today. Net income was $3,724,000 ($1.19 per diluted share) in the second quarter of fiscal 2002, an increase of 44% from the prior year. Net income increased due to substantial increases in sales and gross profit percentages, partially offset by increased operating costs. Sales in the second quarter were $230,636,000, an increase of 8.3% from the prior year. The Company opened a new store in Garwood, NJ on September 26, 2001. Excluding this new store, same store sales increased 3.2%. Net income for the six month period was $6,345,000, a 32% increase from the prior year. Excluding a non-cash charge of $640,000 related to the Ventnor store, which closed February 5, 2002, net income increased 41% for the six month period. Sales for the six month period were $441,468,000, an increase of 7.4% from the prior year. Same store sales increased 4.5%. Village Super Market operates a chain of 22 supermarkets under the ShopRite name in New Jersey and eastern Pennsylvania. A new superstore in Hammonton, NJ is expected to open on March 6, 2002. The following table summarizes Village's results for the quarter and six months ended January 26, 2002:
January 26, 2002 January 27, 2001 13 Weeks Ended Sales $230,636,000 $212,920,000 Net Income $ 3,724,000 $ 2,582,000 Net Income Per Share - Basic $ 1.22 $ .86 Net Income Per Share - Diluted $ 1.19 $ .84 26 Weeks Ended Sales $441,468,000 $410,953,000 Net Income $ 6,345,000 $ 4,802,000 Net Income Per Share - Basic $ 2.08 $ 1.59 Net Income Per Share - Diluted $ 2.03 $ 1.57
This Press Release contains "forward-looking statements" within the meaning of federal securities law. The Company cautions the reader that there is no assurance that actual results or business conditions will not differ materially from future results, whether expressed, suggested or implied by such forward-looking statements. Such potential risks and uncertainties include, without limitation, 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 availability of capital, the liquidity of the Company on a cash flow basis, and other risk factors detailed in the Company's filings with the SEC. Exhibit 28(b) F To our Shareholders: I The Company had net income of $2,621,000 in the first quarter ended October 27, 2001. Excluding a non-cash impairment charge, net income R was $3,020,000, an increase of 36% from the prior year. Net income increased due to a substantial increase in sales and gross profit S percentages, partially offset by increased operating costs. T Sales in the first quarter were $210,831,000, an increase of 6.5% from the prior year. The Company opened a new store in Garwood, NJ on September 26, 2001. Excluding this new store and a store closed one year Q ago, sales increased by 5.8%. Excluding the replacement store opened in West Orange, NJ on August 10, 2000, sales increased 4.0% in the quarter. U Gross profit as a percentage of sales increased to 24.9% from 24.2% in the A prior year. Gross profit increased due to improved sales in higher margin departments, improved gross profit percentages in several departments and R incentives received in connection with the opening of the new Garwood store. T Operating and administrative expenses as a percentage of sales increased E to 21.4% from 21.1% in the prior year. The increase was a result of higher fringe benefit and occupancy costs. R The Company recorded a non-cash impairment charge of $640,000 in the first quarter of fiscal 2002 to write off the book value of the equipment of the R Ventnor store. The sublessor of this property rejected its lease pursuant to the US Bankruptcy Code. The Company has been unsuccessful in E negotiating new lease terms with the property owner and it is expected that the store location will be required to be vacated sometime in early 2002. P During the first quarter, the Company had capital expenditures of O $5,394,000. The major expenditure was the completion of construction and equipment for the new store in Garwood. The Company has budgeted R approximately $20 million for capital expenditures in fiscal 2002. The construction of a new superstore in Hammonton, NJ began during the T first quarter. The table accompanying this report summarizes Village Super Market's results for the quarter ended October 27, 2001. Respectfully, Perry Sumas James Sumas President Chairman of the Board December 13, 2001
INCOME STATEMENT DATA 13 Weeks Ended 13 Weeks Ended October 27, 2001 October 28, 2000 Sales $ 210,831,000 $ 198,033,000 Net Income $ 2,621,000 $ 2,220,000 Net Income Per Share - Basic $ .86 $ .74 Net Income Per Share - Diluted $ .84 $ .73 BALANCE SHEET COMPARISONS October 27, 2001 July 28, 2001 Current Assets $ 73,598,000 $ 69,043,000 Current Liabilities $ 56,952,000 $ 51,956,000 Net Working Capital $ 16,646,000 $ 17,087,000 Long Term Debt $ 43,159,000 $ 43,363,000 Stockholder's Equity $ 87,554,000 $ 84,770,000
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