-----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, AIrx06lEfKZDH5sMmbIBrmvHsx8OwKQDWUYeNyvUtcQdDg8vXwi0XocYnbZ0yeN+ Tdgt2L7fB6Vsc8QXoqa/YQ== 0000103595-04-000004.txt : 20040304 0000103595-04-000004.hdr.sgml : 20040304 20040304155740 ACCESSION NUMBER: 0000103595-04-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040124 FILED AS OF DATE: 20040304 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: 04648933 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 village-jan04.txt VILLAGE SUPER MARKET, INC. 10-Q FOR JANUARY 24, 2004 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 24, 2004 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 by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes_____ No __X__ Indicate the number of shares outstanding of the issuer's classes of common stock as of the latest practicable date:
March 2, 2004 Class A Common Stock, No Par Value 1,517,200 Shares Class B Common Stock, No Par Value 1,594,076 Shares
VILLAGE SUPER MARKET, INC. INDEX PART I PAGE NO. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) 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 . . . . . . . . . . . . 7-12 Item 3. Quantitative & Qualitative Disclosures about Market Risk. . 12-13 Item 4. Controls and Procedures. . . . . . . . . . . . . . . . . . 13 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 14 Signatures . . . . . . . . . . . . . . . . . . . . . . . . 14 PART I - FINANCIAL INFORMATION Item 1. Financial Statements VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
January 24, July 26, 2004 2003 ASSETS Current assets Cash and cash equivalents $ 40,636 $ 48,500 Merchandise inventories 32,767 32,304 Patronage dividend receivable 1,042 3,634 Note receivable from related party 20,042 --- Other current assets 5,607 5,207 -------- -------- Total current assets 100,094 89,645 Property, equipment and fixtures, net 96,800 96,320 Investment in related party, at cost 15,875 15,875 Goodwill 10,605 10,605 Other assets 4,157 4,133 -------- -------- TOTAL ASSETS $ 227,531 $ 216,578 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 7,636 $ 7,730 Accounts payable to related party 36,815 32,348 Accounts payable and accrued expenses 26,663 21,323 -------- -------- Total current liabilities 71,114 61,401 Long-term debt 31,336 37,241 Other liabilities 12,088 11,159 Shareholders' equity Class A common stock - no par value, issued 1,762,800 shares 18,718 18,535 Class B common stock - no par value, issued and outstanding 1,594,076 shares 1,035 1,035 Retained earnings 98,968 93,239 Accumulated other comprehensive loss (2,330) (2,330) Less cost of Class A treasury shares - (245,600 shares at January 24, 2004 and 267,600 shares at July 26, 2003) (3,398) (3,702) -------- -------- Total shareholders' equity 112,993 106,777 -------- -------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 227,531 $ 216,578 ======== ========
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. 24, 2004 Jan. 25, 2003 Jan. 24, 2004 Jan. 25, 2003 Sales $ 242,209 $ 233,911 $ 468,943 $ 450,449 Cost of sales 180,104 176,020 349,690 338,525 --------- --------- --------- --------- Gross profit 62,105 57,891 119,253 111,924 Operating and administrative expense 52,865 49,650 102,907 96,591 Depreciation and Amortization 2,263 2,256 4,479 4,459 --------- --------- --------- --------- Operating income 6,977 5,985 11,867 10,874 Interest expense, net 592 844 1,213 1,623 Income from partnerships ------ 1,639 ------ 1,639 --------- --------- --------- --------- Income before income taxes 6,385 6,780 10,654 10,890 Income taxes 2,734 2,740 4,484 4,400 --------- --------- --------- --------- Net income $ 3,651 $ 4,040 $ 6,170 $ 6,490 ========= ========= ========= ========= Net income per share: Basic $ 1.18 $ 1.31 $ 2.00 $ 2.11 Diluted $ 1.16 $ 1.28 $ 1.96 $ 2.06
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) 26 Weeks Ended 26 Weeks Ended January 24, 2004 January 25, 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,170 $ 6,490 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,479 4,459 Deferred taxes 660 700 Provision to value inventories at LIFO 675 200 Tax benefit from exercise of stock options 137 ---- Non-cash stock compensation 46 ---- Changes in assets and liabilities: (Increase) in merchandise inventories ( 1,138) ( 801) Decrease in patronage dividend receivable 2,592 1,487 (Increase) decrease in other current assets ( 400) 914 (Increase) in other assets ( 45) ( 257) Increase in accounts payable to related party 4,467 3,234 Increase in accounts payable and accrued expenses 5,340 1,932 Increase in other liabilities 269 236 -------- -------- Net cash provided by operating activities 23,252 18,594 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in note receivable from related party (20,042) ---- Capital expenditures ( 4,938) ( 5,817) -------- --------- Net cash used in investing activities (24,980) ( 5,817) -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 220 106 Principal payments of long-term debt ( 5,999) ( 1,520) Dividends (357) ---- -------- -------- Net cash used in financing activities ( 6,136) ( 1,414) -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (7,864) 11,363 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 48,500 33,770 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 40,636 $ 45,133 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS FOR: Interest $ 1,508 $ 1,886 Income taxes $ 1,029 $ 300 NON-CASH SUPPLEMENTAL DISCLOSURE: Investment in related party $ --- $ 93
See accompanying Notes to Consolidated Condensed Financial Statements. VILLAGE SUPER MARKET, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 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 24, 2004 and the consolidated results of operations and cash flows for the periods ended January 24, 2004 and January 25, 2003. The significant accounting policies followed by Village Super Market, Inc. (the "Company") are set forth in Note 1 to the Company's consolidated financial statements included in the July 26, 2003 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with these financial statements. 2. The results of operations for the period ended January 24, 2004 are not necessarily indicative of the results to be expected for the full year. 3. At both January 24, 2004 and July 26, 2003, approximately 70% 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 $10,387,000 and $9,712,000 higher than reported at January 24, 2004 and July 26, 2003, respectively. 4. The number of common shares outstanding for calculation of net income per share is as follows:
13 Weeks Ended 26 Weeks Ended 1/24/04 1/25/03 1/24/04 1/25/03 Weighted average shares outstanding - basic 3,094,518 3,082,468 3,092,029 3,079,289 Dilutive effect of employee stock options 51,143 67,385 49,114 68,684 --------- --------- --------- --------- Weighted average shares outstanding - diluted 3,145,661 3,149,853 3,141,143 3,147,973 ========= ========= ========= =========
5. The note receivable from related party of $20,042,000 is invested with Wakefern Food Corp. ("Wakefern"), the Company's principal supplier. This unsecured note, which carries interest at prime minus 1.5%, is dated January 15, 2004 and matures January 15, 2005. 6. Comprehensive income was $3,651,000 and $6,170,000 for the quarter and six-month periods ended January 24, 2004, and $4,040,000 and $6,490,000 for the quarter and six-month periods ended January 25, 2003. 7. The fair value of each of the 6,000 options granted in the second quarter of fiscal 2004 was estimated at $11.39 using the Black-Scholes Pricing model with the following assumptions: Expected life 6 years Expected volatility 36.0% Expected dividend yield 1.0% Risk-free rate 4.3% ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Village Super Market, Inc. operates a chain of 23 ShopRite supermarkets in New Jersey and eastern Pennsylvania. The Company is a member of Wakefern, the nations largest retailer-owned food cooperative and owner of the ShopRite name. As further described in the Company's Form 10-K, the Company's ownership interest in Wakefern provides many of the economies of scale in purchasing, distribution, advanced retail technology and advertising associated with larger chains. RESULTS OF OPERATIONS Sales were $242,209,000 in the second quarter of fiscal 2004. Total sales and same store sales both increased 3.5% compared to the second quarter of the prior year. Sales were $468,943,000 for the six-month period of fiscal 2004, an increase of 4.1% from the prior year. Sales increased due to continued improvement in the two stores opened in fiscal 2002 and increased sales in stores remodeled in fiscal 2003. In addition, sales in fiscal 2004 benefited from comparison to a year ago period that included the impact from a substantial number of store openings by competitors, higher levels of promotional activity and a softer economy. Gross profit as a percentage of sales increased to 25.6% and 25.4%, respectively, in the second quarter and six-month periods of fiscal 2004 compared with 24.7% and 24.8%, respectively, in the corresponding periods of the prior year. As a percentage of sales, gross profit increased primarily due to lower promotional spending in the current fiscal year, larger patronage dividends received in excess of amounts accrued in the current fiscal year, reduced Wakefern assessment charges and improved gross margins in several departments. These improvements were partially offset by increased LIFO charges in the current fiscal year. Operating and administrative expenses as a percentage of sales increased to 21.8% and 21.9%, respectively, in the second quarter and six-month periods of fiscal 2004 compared with 21.2% and 21.4%, respectively, in the corresponding prior year periods. As a percentage of sales, fringe benefit costs, primarily contributions to employee heath and pension plans, utility costs and occupancy costs increased in fiscal 2004. As a percentage of sales, payroll costs declined in fiscal 2004 compared to the prior year. Interest expense (net) decreased in the second quarter and six-month periods of fiscal 2004 compared to the corresponding prior year periods due to reduced borrowing levels in the current fiscal year. In addition, the prior fiscal year included interest from a capital lease disposed of in the third quarter of fiscal 2003. The second quarter of fiscal 2003 included $1,639,000 ($967,000 after-tax) of distributions received from two partnerships in which the Company is a limited partner. The Company's ownership interest in these partnerships resulted from its leasing of supermarkets in two shopping centers. The Company remains a tenant in one of the shopping centers. The Company's accounting for these partnerships under the equity method had previously resulted in a zero investment balance in the consolidated financial statements. The effective income tax rate increased to 42.8% and 42.1%, respectively, for the second quarter and six-month periods of fiscal 2004 compared to 40.4% for both the corresponding periods of the prior year. These increases are due to recent tax audits of previous fiscal years. Net income was $3,651,000 in the second quarter of fiscal 2004, a decrease of 10% from the second quarter of the prior fiscal year. Excluding the aforementioned $967,000 effect on net income from partnerships in fiscal 2003, net income would have increased from $3,073,000 to $3,651,000, or 19%. Management believes this is a more appropriate comparison of operating results, as the partnership income is not expected to recur in the near future. This increase is attributable to strong sales growth, increased gross profit percentages and lower interest expense, partially offset by a higher operating and administrative expense percentage. CRITICAL ACCOUNTING POLICIES Critical accounting policies are those accounting policies that management believes are important to the portrayal of the Company's financial condition and results of operations and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's critical accounting policies relating to the impairment of long-lived assets, accounting for patronage dividends earned as a stockholder of Wakefern, and accounting for pension plans are described in the Company's Annual Report on Form 10-K for the year ended July 26, 2003. As of January 24, 2004, there have been no material changes to any of the critical accounting policies contained therein. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $23,252,000 for the six-month period ended January 24, 2004 compared with $18,594,000 for the six-month period ended January 25, 2003. This change is attributable to larger increases in accounts payable to related party and accounts payable and accrued expenses in the current fiscal year than in the prior year due to the timing of payments. In addition, patronage dividends received in fiscal 2004 exceeded fiscal 2003. During the first six months of fiscal 2004, the Company used $23,252,000 of operating cash flow and $7,864,000 of cash on hand to fund capital expenditures of $4,938,000, to make debt payments of $5,999,000 and to invest $20,042,000 of excess cash in a note receivable from Wakefern. The debt payments made included the first installment of $4,285,714 on the Company's unsecured Senior Notes. The investment in the note receivable from Wakefern is a one-year note dated January 15, 2004, which matures January 15, 2005. These funds were previously invested in a demand deposit at Wakefern. Working capital was $28,980,000 at January 24, 2004 compared to $28,244,000 at July 26, 2003. The working capital ratio was 1.41 to one at January 24, 2004 compared to 1.46 to one at July 26, 2003. The Company's working capital needs are reduced since inventory is generally sold by the time payment to Wakefern and other suppliers are due. The Company has budgeted approximately $12 million for capital expenditures in fiscal 2004. Planned expenditures include the expansion and remodel of the Bernardsville store and equipment for the Somers Point replacement store. The Company's primary sources of liquidity in fiscal 2004 are expected to be cash on hand at January 24, 2004 and operating cash flow. The Company has available a $15 million (none outstanding at January 24, 2004) unsecured revolving credit line, which expires September 16, 2004. The Company expects to replace this expiring revolving credit facility during fiscal 2004. There have been no substantial changes as of January 24, 2004 to the contractual obligations discussed on page 6 of the Company's Annual Report on Form 10-K for the year ended July 26, 2003. RELATED PARTY TRANSACTIONS A description of the Company's transactions with Wakefern, its principal supplier, and with other related parties is included on pages 8,16 and 19 of the Company's Annual Report on Form 10-K for the year ended July 26, 2003. There have been no significant changes in the Company's relationship or nature of the transactions with these related parties during the twenty-six weeks of fiscal 2004, except that the Company invested $20,042,000 of cash in a note receivable from Wakefern in fiscal 2004 that was invested in demand and overnight deposits at Wakefern on July 26, 2003. The note, which carries interest at prime minus 1.5%, is dated January 15, 2004 and matures January 15, 2005. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2003, the Financial Accounting Standards Board issued SFAS No. 132 (revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits", to revise employers' annual and quarterly disclosures about pension plans and other postretirement benefit plans. It does not change the measurement or recognition of those plans required by SFAS No. 87, "Employers' Accounting for Pensions", SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits", and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". This Statement retains the disclosure requirements contained in SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits", which it replaces. It requires additional disclosures to those in the original SFAS 132 about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. The annual disclosure requirements under this Statement are effective for the Company's fiscal year ending July 31, 2004, and the quarterly disclosure requirements are effective for the Company's interim periods beginning with the quarter ending April 24, 2004. FORWARD-LOOKING STATEMENTS All statements, other than statements of historical fact, included in this Form 10-Q are or may be considered 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. The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof. The following are among the principal factors that could cause actual results to differ from the forward-looking statements: 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; the success of operating initiatives; consumer spending patterns; increased cost of goods sold, including increased costs from the Company's principal supplier, Wakefern; results of ongoing litigation; the results of union contract negotiations; competitive store openings; the rate of return on pension assets; and other factors detailed herein and in other filings of the Company. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of operations, the Company is exposed to market risks arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential change in the fair value resulting from an adverse movement in interest rates. As of January 24, 2004, the Company's only variable rate borrowings relate to a swap agreement. On October 18, 2001, the Company entered into an interest rate swap agreement with a major financial institution pursuant to which the Company pays a variable rate of six-month LIBOR plus 3.36% (4.60% at January 24, 2004) on an initial notional amount of $10,000,000 expiring in September 2009 in exchange for a fixed rate of 8.12%. The swap agreement notional amount decreases in amounts and on dates corresponding to the fixed rate obligation it hedges. At January 24, 2004 the remaining notional amount of the swap agreement was $8,571,429. A 100 basis point increase in interest rates, applied to the Company's borrowings at January 24, 2004, would result in an annual increase in interest expense and a corresponding reduction in cash flow of approximately $85,714. At January 24, 2004, the Company had demand deposits of $18,614,000 at Wakefern earning interest at prime less 2.5%, or overnight money market rates, which are exposed to the impact of interest rate changes. In addition, at January 24, 2004, the Company had a $20,042,000 adjustable rate promissory note from Wakefern earning interest at prime less 1.5%, which is exposed to the impact of interest rate changes. ITEM 4. CONTROLS AND PROCEDURES As required by Rule 13a-15 under the Exchange Act, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures at the end of the period. This evaluation was carried out under the supervision, and with the participation, of the Company's management, including the Company's Chief Executive Officer along with the Company's Chief Financial Officer. Based upon that evaluation, the Company's Chief Executive Officer, along with the Company's Chief Financial Officer, concluded that the Company's disclosure controls and procedures are effective. There have been no significant changes in internal controls over financial reporting during the second quarter of fiscal 2004. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 6 (a) Exhibits Exhibit 28(a) First Quarter Report to Shareholders dated December 15, 2003. Exhibit 31.1 Certification Exhibit 31.2 Certification Exhibit 32.1 Certification (furnished, not filed) Exhibit 32.2 Certification (furnished, not filed) 6 (b) Reports on Form 8-K. On March 1, 2004, the Company filed a report on Form 8-K with the SEC regarding its release announcing consolidated financial results for the second quarter of fiscal 2004. 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 3, 2004 /s/ James Sumas James Sumas (Chief Executive Officer) Date: March 3, 2004 /s/ Kevin R. Begley Kevin R. Begley (Chief Financial Officer) Exhibit 28(a) F To Our Shareholders: I Net income was $2,519,000 ($.80 per diluted share) in the first quarter of fiscal 2004, an increase of 3% from the first quarter of the prior R year. Net income increased primarily due to strong sales growth, increased gross profit percentages and lower interest expense, partially S offset by higher operating expense percentages. T Sales were $226,734,000 in the first quarter of fiscal 2004. Total sales and same store sales both increased 4.7% compared to the first quarter of the prior year. Sales increased due to continued improvement in the two stores opened in fiscal 2002 and increased sales in stores Q remodeled in fiscal 2003. In addition, sales in the first quarter of fiscal 2004 benefited from comparison to a year ago period that included U the impact of a substantial number of store openings by competitors, high levels of promotional activity and a softer economy. A Gross profit as a percentage of sales increased to 25.2% in the first R quarter of fiscal 2004 compared to 25.0% in the first quarter of the prior year. Gross profit as a percentage of sales increased primarily due to T lower promotional spending in the current fiscal quarter. This impact was partially offset by increased LIFO charges in the current fiscal quarter. R Operating and administrative expenses as a percentage of sales increased to 22.1% in the first quarter of fiscal 2004 compared to 21.7% in the first quarter of the prior year. Fringe benefit costs, primarily R required contributions to employee health and pension plans, and utility costs increased in fiscal 2004. Payroll costs declined in fiscal 2004. E On December 12, 2003, Board of Directors declared a semi-annual cash P dividend of $.14 per Class A common share and $.09 per Class B common share. These dividends will be payable February 20, 2004 to shareholders O of record on January 23, 2004. R T Respectfully, Perry Sumas James Sumas President Chairman of the Board December 15, 2003 All statements, other than statements of historical fact, included in this report are or may be considered 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. The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof. The following are among the principal factors that could cause actual results to differ from the forward-looking statements: 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; the success of operating initiatives; consumer spending patterns; increased cost of goods sold, including increased costs from the Company's principal supplier, Wakefern; results of ongoing litigation; the results of union contract negotiations; competitive store openings; the rate of return on pension assets; and other factors detailed herein and in the Company's filings with the SEC. VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Amounts)
13 Wks. Ended 13 Wks.Ended October 25, 2003 October 26, 2002 Sales $ 226,734 $ 216,538 Cost of sales 169,586 162,505 ---------- ---------- Gross profit 57,148 54,033 Operating and administrative expense 50,042 46,941 Depreciation and amortization 2,216 2,203 ---------- ---------- Operating income 4,890 4,889 Interest expense, net 621 779 ---------- ---------- Income before income taxes 4,269 4,110 Income taxes 1,750 1,660 ---------- ---------- Net income $ 2,519 $ 2,450 ========== ========== Net income per share: Basic $ .82 $ .80 Diluted $ .80 $ .78 Gross profit as a % of sales 25.2% 25.0% Operating and administrative expense as a % of sales 22.1% 21.7%
Exhibit 31.1 I, James Sumas, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Village Super Market, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's second quarter that has materially effected, or is reasonably likely to materially effect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 3, 2004 /s/ James Sumas James Sumas Chief Executive Officer Exhibit 31.2 I, Kevin Begley, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Village Super Market, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's second quarter that has materially effected, or is reasonably likely to materially effect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 3, 2004 /s/ Kevin Begley Kevin Begley Chief Financial Officer & Principal Accounting Officer Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Village Super Market, Inc. (the "Company") on Form 10-Q for the period ending January 24, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James Sumas, Chief Executive Officer of the Company certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ James Sumas James Sumas Chief Executive Officer March 3, 2004 Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Village Super Market, Inc. (the "Company") on Form 10-Q for the period ending January 24, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kevin Begley, Chief Financial Officer of the Company certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Kevin Begley Kevin Begley Chief Financial Officer & Principal Accounting Officer March 3, 2004 -----END PRIVACY-ENHANCED MESSAGE-----