-----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, SEOAIn0n/xxFsP+u7H2iEwPLwC5voHd7p5oGdj/472/2A1xlYpfYoxhG79YuZo2U txIzKH9OjyMKeZkSdz3IWA== 0000103595-98-000005.txt : 19980604 0000103595-98-000005.hdr.sgml : 19980604 ACCESSION NUMBER: 0000103595-98-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980425 FILED AS OF DATE: 19980603 SROS: NASD 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: 98641422 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 SUPER MARKET, INC. 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: April 25, 1998 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) (201) 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:
June 1, 1998__ Class A, Common Stock, No Par Value 1,375,800 Shares Class B, Common Stock, No Par Value 1,594,076 Shares
VILLAGE SUPER MARKET, INC. INDEX PART 1 PAGE NO. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheets 3 Consolidated Condensed Statement of Income 4 Consolidated Condensed Statement 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 8-9 PART II OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 10 Signatures 11 Exhibit 28(a) 12 Exhibit 28(b) 13-14 PART 1 - FINANCIAL INFORMATION Item 1 - Financial Statements
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) April 25, July 26, 1998 1997 ASSETS Current assets Cash and cash equivalents $ 4,000 $ 4,270 Merchandise inventories 26,189 24,836 Patronage dividend receivable 1,222 2,048 Miscellaneous receivables 3,672 3,269 Other current assets 855 850 Total current assets 35,938 35,273 Property, equipment and fixtures, net 74,241 72,294 Investment in related party 10,438 10,351 Goodwill, net 10,164 10,339 Other intangibles, net 2,093 2,284 Other assets 2,264 2,223 TOTAL ASSETS $135,138 $132,764
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 2,660 $ 3,260 Accounts payable to related party 26,192 27,141 Accounts payable and accrued expenses 17,478 17,017 Income taxes payable 182 462 Total current liabilities 46,512 47,880 Long-term debt, less current portion 25,409 24,027 Deferred income taxes 3,276 3,776 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 and outstanding 1,035 1,035 Retained earnings 46,482 44,102 Less cost of treasury shares (387,000 shares at April 25, 1998 and 447,000 shares at July 26, 1997) (5,705) (6,185) Total shareholders' equity 59,941 57,081 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $135,138 $132,764
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 39 Wks End 39 Wks End Apr 25,1998 Apr 26,1997 Apr 25,1998 Apr 26,1997 Sales $ 169,594 $ 165,494 $ 522,182 $ 512,291 Cost of Sales 126,765 124,386 392,164 385,404 Gross margin 42,829 41,108 130,018 126,887 Operating and admin. expenses 38,727 38,122 117,933 116,918 Depreciation and amortization expense 1,975 1,915 5,529 5,603 Operating income 2,127 1,071 6,556 4,366 Interest expense 745 799 2,380 2,521 Income before income taxes 1,382 272 4,176 1,845 Provision for income taxes 594 109 1,796 738 Net Income $ 788 $ 163 $ 2,380 $ 1,107 Net income per share: Basic $ .27 $ .06 $ .81 $ .38 Diluted $ .26 $ .06 $ .80 $ .38
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Dollars in Thousands) 39 Weeks Ended 39 Weeks Ended April 25, 1998 April 26, 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,380 $ 1,107 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,529 5,603 Deferred taxes (500) - Provision to value inventories at LIFO 225 450 Change in assets and liabilities: (Increase) decrease in inventory (1,578) 941 Decrease in patronage dividend receivable 826 1,065 (Increase) in misc. receivables (403) (740) (Increase) in other current assets (5) (6) (Increase) in other assets (53) (32) Increase (decrease) in accounts payable to related party (949) 435 Increase in accounts payable and accrued expenses 461 749 (Decrease) in income taxes payable (280) - Net cash provided by operating activities 5,653 9,572 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7,098) (6,670) Investment in related party (87) (147) Net cash used in investing activities (7,185) (6,817) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 4,700 2,500 Proceeds from exercise of 60,000 stock options 480 - Principal payments of long-term debt (3,918) (5,167) Net cash provided (used) by financing activities 1,262 (2,667) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (270) 88 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,270 3,244 CASH AND CASH EQUIVALENTS END OF PERIOD $ 4,000 $ 3,332
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 April 25, 1998 and July 26, 1997 and the results of operations and cash flows for the periods ended April 25, 1998 and April 26, 1997. The significant accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the July 26, 1997 Village Super Market, Inc. Annual Report. 2. The results of operations for the period ended April 25, 1998 are not necessarily indicative of the results to be expected for the full year. 3. At both April 25, 1998 and July 26, 1997 approximately 66% of the 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 $7,804,000 and $7,579,000 higher than reported at April 25, 1998 and July 26, 1997, respectively. 4. In accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share," the consolidated statement of income includes the presentation of both basic and diluted net income per share. Basic net income per share was computed by dividing net income by the weighted-average number of common shares outstanding, which was 2,969,876 and 2,943,187 for the quarter and nine month periods ended April 25, 1998, respectively. Diluted net income per share was calculated by increasing the denominator from the basic calculations to reflect the dilutive impact of stock options outstanding. The number of shares added to the denominator was 50,538 and 24,748 for the quarter and nine month periods ended April 25, 1998, respectively. The options outstanding were not dilutive in the fiscal 1997 periods presented. The diluted net income per share calculations include the effect of 219,000 options granted on December 5, 1997 under the 1997 Incentive and Non-Statutory Stock Option Plan. All options were granted at an exercise price equal to fair market value. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales in the third quarter of fiscal 1998 increased 2.5% to $169,594,000. This same store sales increase reflects improved sales in most stores, particularly those that were recently remodeled, partially offset by sales declines in stores affected by competitive openings. Sales for the nine month period increased 1.9% to $522,182,000. Same store sales increased 2.3% in the nine month period. Gross margin as a percentage of sales was 25.2% and 24.9% for the quarter and nine month periods ended April 25, 1998, respectively, compared with 24.8% in both of the corresponding prior year periods. The improvement in gross margin for the quarter is due to an improved mix of sales toward higher margin departments and to improved gross margins in several departments. Operating and administrative expenses as a percentage of sales for the quarter and nine months ended April 25, 1998 declined to 22.8% and 22.6%, respectively, compared with 23.0% and 22.8%, respectively, in the corresponding prior year periods. The improvement in operating expenses as a percentage of sales for the quarter was a result of lower worker's compensation claims and the effect of spreading fixed costs over an improved sales base. These improvements were partially offset by higher coupon costs associated with Easter promotions. The increase in net income of 383% in the quarter was due to the 2.5% improvement in same store sales, the increased gross margin percentage and lower operating costs as a percentage of sales due to reduced worker's compensation claims. LIQUIDITY AND FINANCIAL RESOURCES Current liabilities exceeded current assets by $10,574,000 at April 25, 1998 compared to $12,607,000 at July 26, 1997. The current ratio increased to .77 at April 25, 1998 from .74 at July 26, 1997. The Company's working capital needs are reduced by its high rate of inventory turnover and because the warehousing 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 nine month period, cash provided by operating activities of $5,653,000, additional long-term borrowings of $4,700,000 and proceeds from the exercise of stock options of $480,000 were used to make principal payments on long-term debt in the amount of $3,918,000 and to fund capital expenditures of $7,098,000. Capital expenditures in the nine month period related primarily to the ongoing expansion and remodel of the Livingston store, minor remodels of the Watchung and Bernardsville stores and upgrades to retail technology systems. At April 25, 1998, $7,700,000 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 April 25, 1998. IMPACT OF YEAR 2000 The Company has participated, along with the food cooperative to which it belongs, in an assessment of its computerized systems to determine their ability to correctly identify the year 2000 and is devoting the necessary internal and external resources to replace, upgrade or modify all significant systems which do not correctly identify the year 2000. The Company anticipates that all systems will be year 2000 compliant before the end of 1999. However, if such modifications and conversions are not completed timely, or if computer systems of third parties with whom the Company deals are not converted in a timely manner, the year 2000 problem may have a material impact on the operations 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 June 2, 1998. Exhibit 28(b) - Second Quarter Report to Shareholders 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: June 2, 1998 /s/ Perry Sumas Perry Sumas (President) Date: June 2, 1998 /s/ Kevin R. Begley Kevin R. Begley (Chief Financial Officer) Exhibit 28(a) VILLAGE SUPER MARKET,INC. REPORTS RESULTS FOR THE QUARTER AND NINE MONTHS ENDED APRIL 25, 1998 Springfield, New Jersey - June 2, 1998 - Village Super Market, Inc. reported sales and net income for the third quarter and nine months ended April 25, 1998. Net income was $788,000 (26 cents per diluted share) in the third quarter of fiscal 1998, an increase of 383% from the prior year. Sales for the quarter were $169,594,000, which represents a same store sales increase of 2.5%. The significant increase in net income in the quarter was due to the improved same store sales, increased gross margin percentages and lower operating costs as a percentage of sales. Gross margins increased due to an improved mix of sales towards higher margin departments and increased gross margins in several departments. Operating costs decreased due to lower worker's compensation claims and the spreading of fixed costs over a higher sales base, which was partially offset by increased coupon costs. For the nine month period, sales were $522,182,000, an increase of 1.9% from the prior year. Same store sales increased 2.3% in the nine month period. Net income for the nine month period was $2,380,000, an increase of 115% 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 results for the quarter and nine months ended April 25, 1998:
April 25, 1998 April 26, 1997 13 Weeks Ended Sales $169,594,000 $165,494,000 Net Income $ 788,000 $ 163,000 Net Income Per Share - Basic $ .27 $ .06 Net Income Per Share - Diluted $ .26 $ .06 39 Weeks Ended Sales $522,182,000 $512,291,000 Net Income $ 2,380,000 $ 1,107,000 Net Income Per Share - Basic $ .81 $ .38 Net Income Per Share - Diluted $ .80 $ .38
Exhibit 28(b) S* To Our Shareholders: E* The Company had net income of $1,127,000 in the second quarter ended January 24, 1998, an increase of 71% from the prior year. Sales in the C* second quarter of fiscal 1998 were $182,700,000, which represents a same store sales increase of 2.9%. Same store sales increased due to the O* positive impact of remodeled stores and increased Thanksgiving promotional activities, partially offset by sales declines in stores N* affected by competitive openings. D* For the first six months of fiscal 1998, the Company had net income of $1,592,000, an increase of 69% from the prior year. Sales for the six * month period were $352,588,000, an increase of 1.7% from the prior year. Same store sales increased 2.2% in the six month period. Q* Gross margin as a percentage of sales was 24.7% in the quarter and six month periods of both fiscal 1998 and 1997. A slight improvement due to U* improved mix of sales in higher margin departments was offset by lower produce department gross margins A* due to lower retail prices. R* Operating and administrative expenses as a percentage of sales for the quarter and six months declined to 22.2% and 22.5%, respectively, T* compared with 22.6% and 22.7%, respectively, in the corresponding prior year periods. The improvement in operating expenses as a percentage of sales E* for the quarter was a result of lower payroll costs, lower workers' compensation claims and the effect of spreading fixed costs over a much R* higher sales base. These improvements were partially offset by higher coupon costs associated with Thanksgiving turkey promotions. R* Net income in the quarter and six month periods improved due to higher same store sales and lower operating costs due to improvements in payroll and E* workers' compensation claims. P* Capital expenditures for the six month period were $4,430,000, which relate primarily to the expansion and remodel of the Livingston store, a minor O* remodel of the Watchung store and an upgrade to the point of sale software. R* The table accompanying this report summarizes Village Super Market's T* results for the quarter and six month periods ended January 24, 1998. * Respectfully, * Perry Sumas James Sumas President Chairman of the Board * * March 6, 1998
INCOME STATEMENT DATA 13 Weeks Ended 13 Weeks Ended January 24, 1998 January 25, 1997 Sales $ 182,700,000 $ 177,598,000 Net Income $ 1,127,000 $ 660,000 Net Income Per Share $ .38 $ .23 26 Weeks Ended 26 Weeks Ended January 24, 1998 January 25, 1997 Sales $ 352,588,000 $ $46,797,000 Net Income $ 1,592,000 $ 944,000 Net Income Per Share $ .54 $ .32
BALANCE SHEET COMPARISONS January 24, 1998 July 26, 1997 Current Assets $ 36,533,000 $ 35,273,000 Current Liabilities $ 50,311,000 $ 47,880,000 Net Working Capital (Deficit) $ (13,778,000) $ (12,607,000) Long-Term Debt $ 22,044,000 $ 24,027,000 Stockholders' Equity $ 59,153,000 $ 57,081,000
EX-27 2
5 1,000 9-MOS JUL-26-1997 APR-25-1998 4000 0 3672 0 26189 35938 140258 66017 135138 46512 25409 0 0 19164 44053 135138 522182 522182 392164 392164 123462 0 2380 4176 1796 2380 0 0 0 2380 .81 .80
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