-----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, OSTa6dPkquWSuQHaoPjp92ymeIPG6KuRoZqKPrfcdwFkLJfKipmVQPpao0hD8XAy K8Xdt6nF2jpulh5Qc3Vv2g== 0000103595-98-000009.txt : 19981203 0000103595-98-000009.hdr.sgml : 19981203 ACCESSION NUMBER: 0000103595-98-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981024 FILED AS OF DATE: 19981202 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: 98762673 BUSINESS ADDRESS: STREET 1: 733 MOUNTAIN AVE CITY: SPRINGFIELD STATE: NJ ZIP: 07081 BUSINESS PHONE: 2014672200 MAIL ADDRESS: STREET 1: 733 MOUNTAIN AVE CITY: SPRINGFIELD STATE: NJ ZIP: 07081 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended: October 24, 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) (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:
November 20, 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 I PAGE NO. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheets 3 Consolidated Condensed Statements of Income 4 Consolidated Condensed Statements of Cash Flows 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 Exhibit 28(a) 12 PART I - FINANCIAL INFORMATION Item 1. Financial Statements
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) October 24, July 25, 1998 1998 ASSETS Current assets Cash and cash equivalents $ 5,149 $ 5,679 Merchandise inventories 28,327 26,549 Patronage dividend receivable 3,072 1,969 Miscellaneous receivables 4,461 3,416 Other current assets 817 778 Total current assets 41,826 38,391 Property, equipment and fixtures, net 74,637 73,331 Investment in related party 10,470 10,468 Goodwill, net 10,006 10,073 Other intangibles, net 1,967 2,030 Other assets 4,229 4,215 TOTAL ASSETS $143,135 $138,508 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 2,925 $ 2,830 Accounts payable to related party 26,991 27,370 Accounts payable and accrued expenses 15,985 17,583 Income taxes payable 1,132 290 Total current liabilities 47,033 48,073 Long-term debt, less current portion 30,262 25,700 Deferred income taxes 3,092 3,167 Shareholders' equity Class A common stock - no par value, issued 1,762,800 shares 18,129 18,129 Class B common stock - no par value, issued & outstanding 1,594,076 shares 1,035 1,035 Retained earnings 48,939 47,759 Less cost of treasury shares - (387,000 shares) (5,355) (5,355) Total shareholders' equity 62,748 61,568 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $143,135 $138,508
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Amounts) 13 Weeks Ended 13 Weeks Ended October 24, 1998 October 25, 1997 Sales $ 178,058 $ 169,888 Cost of sales 132,941 127,776 Gross margin 45,117 42,112 Operating and administrative expense 40,374 38,723 Depreciation and amortization expense 1,929 1,764 Operating income 2,814 1,625 Interest expense 779 809 Income before income taxes 2,035 816 Provision for income taxes 855 351 Net income $ 1,180 $ 465 Net income per share: Basic $ .40 $ .16 Diluted $ .39 $ .16
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Dollars in Thousands) 13 Wks. Ended 13 Wks. Ended Oct. 24, 1998 Oct. 25, 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,180 $ 465 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 1,929 1,764 Deferred taxes (75) ( 150) Provision to value inventories at LIFO 125 150 Changes in assets and liabilities: (Increase) in inventory (1,903) ( 552) (Increase) in patronage dividend receivable (1,103) (1,241) (Increase) in misc. receivables (1,045) ( 272) (Increase) in other current assets ( 39) ( 15) (Increase) in other assets ( 14) ( 14) (Decrease) in accounts payable to related party ( 379) (1,359) (Decrease) in accounts payable and accrued expenses (1,598) ( 523) Increase (decrease) in income taxes payable 842 ( 48) Net cash used by operating activities (2,080) (1,795) CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (3,105) (1,696) Investment in related party ( 2) ( 29) Net cash used by investing activities (3,107) (1,725) CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 5,000 5,000 Principal payments of long-term debt ( 343) ( 923) Net cash provided by financing activities 4,657 4,077 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 530) 557 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,679 4,270 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,149 $ 4,827
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 October 24, 1998 and July 25, 1998 and the results of operations and cash flows for the periods ended October 24, 1998 and October 25, 1997. The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July 25, 1998 Village Super Market, Inc. Annual Report. 2. The results of operations for the period ended October 24, 1998 are not necessarily indicative of the results to be expected for the full year. 3. At both October 24, 1998 and July 25, 1998, approximately 66% of merchandise inventories are valued by the LIFO method while the balance is valued by FIFO. If the FIFO method had been used for the entire inventory, inventories would have been $7,840,000 and $7,715,000 higher than reported at October 24, 1998 and July 25, 1998 respectively. 4. During fiscal 1998, the Company adopted SFAS No. 128, "Earnings Per Share." This statement requires the presentation of both basic and diluted net income per share. The number of common shares outstanding for calculation of net income per share is as follows:
October 24, October 25, 1998 1997 Weighted average shares outstanding - basic 2,969,876 2,909,876 Dilutive effect of employee stock options 87,310 14,667 Weighted average shares outstanding - diluted 3,057,186 2,924,543
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales in the first quarter were $178,058,000, which represents a same store sales increase of 4.8% from the prior year. This acceleration in same store sales growth from the 2.8% experienced in the fourth quarter of the prior year is a result of the introduction of double coupons in northern New Jersey during the current quarter. On September 6, 1998, the Company, as well as most supermarket competitors, began offering to double the value of manufacturer coupons in the 16 stores in northern New Jersey where it previously had not offered double coupons. Gross margin as a percentage of sales increased to 25.3% from 24.8% in the prior year. Gross margin percentages improved in most selling departments when compared to the prior year. This is in part due to a reduction in sale items penetration as a result of offering double coupons. Operating and administrative expenses as a percentage of sales declined to 22.7% from 22.8% in the prior year. This improvement was primarily a result of the effect of spreading fixed costs over a greatly improved sales base slightly exceeding the increased costs of double coupon expense in the current quarter. The increase in net income of 154% for the quarter is primarily attributable to the 4.8% sales increase and the substantially improved gross margin percentage. LIQUIDITY AND FINANCIAL RESOURCES Current liabilities exceeded current assets by $5,207,000 at October 24, 1998 compared to $9,682,000 at July 25, 1998. The current ratio increased to .89 at October 24, 1998 from .80 at July 25, 1998. The Company's working capital needs are reduced by its high rate of inventory turnover and because the warehousing and distribution arrangements accorded to the Company as a member of Wakefern permit it to minimize inventory levels and sell most merchandise before payment is required. During the quarter, $5,000,000 of additional borrowings under the Company's credit facilities were used to fund capital expenditures of $3,105,000, to make principal payments on long term debt of $343,000 and to fund cash used by operations. The majority of capital expenditures in the quarter related to the expansion and remodel of the Livingston store, which is nearly complete. At October 24, 1998, $13,500,000 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 October 24, 1998. YEAR 2000: The Company is participating with Wakefern Food Corporation ("Wakefern"), the retailer owned food cooperative to which it belongs and its principal supplier, in a comprehensive assessment of its information technology systems ("IT Systems") and its process control and other systems that include micro-controllers ("Non-IT Systems") to identify the systems that could be affected by the Year 2000 ("Y2K") issue. The Company and Wakefern have assessed all systems for Y2K readiness, giving the highest priority to those IT Systems that are considered critical to its business operations. At present, the Company has implemented its cash and sales and payroll applications, and will implement the general ledger and accounts payable applications in late 1998. Some in-store IT Systems are currently Y2K compliant. Others, including receiving, labor management, pharmacy and electronic payments, are at various stages of implementation or testing. The Company anticipates that all critical IT Systems will be Y2K complaint before the end of 1999. The Company has substantially completed an inventory of its Non-IT Systems, which includes those systems containing embedded chip technology commonly found in buildings and equipment connected with a structure. The systems have been prioritized and assessed for compliance. Ongoing testing and implementation of any remediation required for the Non-IT Systems will be performed throughout 1999. The Company and Wakefern are utilizing the necessary internal and external resources to replace, upgrade or modify all significant systems affected by Y2K. The total estimated costs to remediate the Y2K issue will not have a significant adverse affect on continuing operations. All Y2K costs are being expensed as incurred. The Company is in the process of developing contingency plans for those areas which may be affected by Y2K. Although the full consequences are unknown, the failure of either the Company's critical systems or those of its material third parties, including Wakefern, to be Y2K compliant could result in the interruption of its business, which could have a material adverse affect on the results of operations or financial condition of the Company. Forward-Looking Statements: This Form 10-Q to shareholders contains "forward-looking statements" within the meaning of federal securities law. The Company cautions the reader that there is no assurance that actual results or business conditions will not differ materially from future results, whether expressed, suggested or implied by such forward-looking statements. Such potential risks and uncertainties include, without limitation, competitive pressures from the Company's operating environment, the ability of the Company to maintain and improve its sales and margins, the liquidity of the Company on a cash flow basis, the success of operating initiatives, Y2K issues relating to computer applications, and other risk factors detailed herein and in other filings of the Company. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 6(a) Exhibits Exhibit 28(a) - Press Release dated November 20, 1998. 6(b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Village Super Market, Inc. Registrant Date: November 24, 1998 /s/ Perry Sumas Perry Sumas (President) Date: November 24, 1998 /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 24, 1998 Contact: Kevin Begley, C.F.O. (973) 467-2200 - Ext. 220 Springfield, New Jersey - November 20, 1998 - Village Super Market, Inc. reported sales and net income for the first quarter ended October 24, 1998, Perry Sumas, President announced today. Net income was $1,180,000 ($.39 per diluted share) in the first quarter of fiscal 1999, an increase of 154% from the prior year. First quarter sales were $178,058,000, a same store sales increase of 4.8% from the prior year. The significant increase in first quarter net income was due to the strong improvement in same store sales and substantially increased gross margin percentages. Sales increased above the previous trend primarily due to the introduction of double coupons into northern New Jersey, where 16 of the Company's stores operate, approximately midway through the first quarter. Gross margin percentages increased in many of the Company's selling departments, leading to an overall increase in gross margin percentages of .5%. Operating expenses as a percentage of sales declined slightly as the effect of spreading costs over the much improved sales base slightly exceeded the increased cost from the doubling of manufacturer coupons. Village Super Market operates a chain of 22 supermarkets under the ShopRite name in New Jersey and eastern Pennsylvania. The following table summarizes Village's results for the quarter ended October 24, 1998: [CAPTION] 13 Weeks Ended 13 Weeks Ended October 24, 1998 October 25, 1997 Sales $178,058,000 $169,888,000 Net Income $ 1,180,000 $ 465,000 Net Income Per Share - Basic $ .40 $ .16 Net Income Per Share - Diluted $ .39 $ .16
EX-27 2
5 3-MOS JUL-25-1998 OCT-24-1998 5149 0 4461 0 28327 41826 143996 69359 143135 47033 30262 19164 0 0 43584 143135 178058 178058 132941 132941 42303 0 779 2035 855 1180 0 0 0 1180 .40 .39
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