10-Q 1 village10q012806.htm VILLAGE SUPER MARKET, INC. FORM 10-Q JANUARY 28, 2006

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 28, 2006

[ ]	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 or organization)	(I. R. S. Employer 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

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of the issuer's classes of common stock as of the latest practicable date:

	March 7, 2006

Class A Common Stock, No Par Value	1,641,813 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 Operations	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	8-12

Item 3.	Quantitative & Qualitative Disclosures about Market Risk	13

Item 4.	Controls and Procedures	13



PART II

OTHER INFORMATION

Item 6.	Exhibits	14

Signatures		14

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VILLAGE SUPER MARKET, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in Thousands)

(Unaudited)

	January 28,			July 30,
	2006			2005
ASSETS
Current assets
Cash and cash equivalents	$	73,136		$	62,842
Merchandise inventories		31,952			30,176
Patronage dividend receivable		2,120			5,470
Other current assets		7,397			7,105
Total current assets		114,605			105,593

Property, equipment and fixtures, net		120,546			119,903
Investment in related party, at cost		15,670			15,670
Goodwill		10,605			10,605
Other assets		2,872			2,722

TOTAL ASSETS	$	264,298		$	254,493

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Current portion of long-term debt	$	5,932		$	6,211
Current portion of notes payable to related party		600			607
Accounts payable to related party		46,078			40,910
Accounts payable and accrued expenses		23,996			21,551
Total current liabilities		76,606			69,279

Long-term debt		27,587			32,751
Notes payable to related party		502			799
Other liabilities		19,345			18,420

Shareholders' equity
Class A common stock - no par value, issued 1,818 shares		20,372			19,834
Class B common stock - no par value, 1,594 shares issued and outstanding		1,035			1,035
Retained earnings		125,983			119,507
Accumulated other comprehensive loss		(4,662	)		(4,662	)
Less cost of 176 Class A treasury shares		(2,470	)		(2,470	)

Total shareholders’ equity		140,258			133,244

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	264,298		$	254,493

See accompanying Notes to Consolidated Condensed Financial Statements.

VILLAGE SUPER MARKET, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(in Thousands Except Per Share Amounts)

(Unaudited)

	13 Wks. Ended		13 Wks. Ended		26 Wks. Ended		26 Wks. Ended
	Jan. 28, 2006		Jan. 29, 2005		Jan. 28, 2006		Jan. 29, 2005

Sales	$	266,038	$	255,992	$	509,483	$	493,344

Cost of sales		197,106		190,570		377,142		368,048

Gross profit		68,932		65,422		132,341		125,296

Operating and administrative expense		58,091		56,122		113,181		108,679

Depreciation and amortization		2,863		2,779		5,665		5,160


Operating income		7,978		6,521		13,495		11,457

Interest expense, net		350		646		778		1,027

Income from partnership		----		1,509		----		1,509


Income before income taxes		7,628		7,384		12,717		11,939

Income taxes		3,181		3,027		5,303		4,895

Net income	$	4,447	$	4,357	$	7,414	$	7,044

Net income per share:
Basic	$	1.40	$	1.38	$	2.33	$	2.23
Diluted	$	1.38	$	1.37	$	2.29	$	2.21

See accompanying Notes to Consolidated Condensed Financial Statements.

VILLAGE SUPER MARKET, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in Thousands) (Unaudited)

	26 Weeks Ended			26 Weeks Ended
	January 28, 2006			January 29, 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	7,414		$	7,044
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of assets		(459	)		----
Income from partnership		----			(1,509	)
Depreciation and amortization		5,665			5,160
Deferred taxes		600			619
Provision to value inventories at LIFO		600			650
Non-cash share-based compensation		538			17
Tax benefit from exercise of stock options		----			192
Changes in assets and liabilities:
(Increase) in merchandise inventories		( 2,376	)		( 1,139	)
Decrease in patronage dividend receivable		3,350			2,942
(Increase) in other current assets		( 292	)		( 1,283	)
(Increase) in other assets		( 170	)		( 81	)
Increase in accounts payable to related party		5,168			4,495
Increase in accounts payable and accrued expenses		3,286			141
Increase in other liabilities		325			425
Net cash provided by operating activities		23,649			17,673

CASH FLOWS FROM INVESTING ACTIVITIES:
Maturity of note receivable from related party		----			20,274
Proceeds from partnership distribution		----			2,516
Proceeds from sale of assets		480			----
Capital expenditures		( 6,309	)		( 9,612	)
Net cash (used in) provided by investing activities		( 5,829	)		13,178

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		----			262
Principal payments of long-term debt		( 5,747	)		( 5,926	)
Dividends		( 1,779	)		( 438	)
Net cash used in financing activities		( 7,526	)		( 6,102	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		10,294			24,749

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		62,842			36,972

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	73,136		$	61,721

SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS FOR:
Interest	$	1,715		$	1,593
Income taxes	$	3,555		$	4,856

NON-CASH SUPPLEMENTAL DISCLOSURE:

Investment in related party	$	----		$	4
Capital lease obligation incurred	$	----		$	11,382
Dividends declared and unpaid	$	----		$	654

See accompanying Notes to Consolidated Condensed Financial Statements.

VILLAGE SUPER MARKET, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(in Thousands)

(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 28, 2006 and the consolidated results of operations and cash flows for the thirteen and twenty-six week periods ended January 28, 2006 and January 29, 2005.

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 30, 2005 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with these financial statements.

2. Certain amounts have been reclassified in the January 29, 2005 consolidated condensed financial statements to conform to the January 28, 2006 presentation. These reclassifications include offsetting decreases in net cash provided by operating activities and net cash used in financing activities of $216.

3. The results of operations for the period ended January 28, 2006 are not necessarily indicative of the results to be expected for the full fiscal year.

4. At both January 28, 2006 and July 30, 2005, 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 $12,139 and $11,539 higher than reported at January 28, 2006 and July 30, 2005, respectively.

5. The number of common shares outstanding for calculation of net income per share is as follows:

	13 Weeks Ended				26 Weeks Ended
	1/28/06		1/29/05		1/28/06		1/29/05

Weighted average shares outstanding -basic		3,184		3,163		3,184		3,158
Dilutive effect of share-based compensation		47		27		49		25
Weighted average shares outstanding - diluted		3,231		3,190		3,233		3,183

Options to purchase 5 shares of common stock at January 28, 2006 were excluded from the computation of diluted net income per share because their effect would be antidulutive. No securities were excluded from the computation of diluted net income per share at January 29, 2005.

6. Comprehensive income was $4,447 and $7,414 for the quarter and six-month periods ended January 28, 2006, and $4,357 and $7,044 for the quarter and six-month periods ended January 29, 2005.

7. The Company sponsors four defined benefit pension plans. Net periodic pension costs for the four plans includes the following components:

	13 Weeks Ended						26 Weeks Ended
	1/28/06			1/29/05			1/28/06			1/29/05

Service cost	$	524		$	396		$	1,048		$	792
Interest cost on projected benefit obligations		363			280			726			560
Expected return on plan assets		(263	)		(186	)		(526	)		(372	)
Net amortization and deferral		269			110			538			____220
Net periodic pension cost	$	893		$	600		$	1,786		$	1,200

As of January 28, 2006, the Company has contributed $107 to its pension plans in fiscal 2006. The Company expects to contribute an additional $1,893 during the remainder of fiscal 2006 to fund its pension plans.

8. The Company closed a stand-alone drugstore on December 5, 2004 and remains obligated for future lease commitments for the closed store. The Company recorded a charge in the second quarter of fiscal 2005 for future lease obligations, net of estimated sublease rentals, in the amount of $463. On March 1, 2006 the Company exercised an option to extend this lease for competitive purposes. Accordingly, the Company no longer accounts for this lease commitment as an exit activity and has reversed the remaining $211 liability in the second quarter of fiscal 2006.

9. The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), “Share-Based Payment”, on May 1, 2005 utilizing the modified prospective application. Prior to May 1, 2005 the Company utilized the fair value recognition provisions of SFAS No. 123. The adoption of SFAS 123(R) did not have a material impact on the consolidated financial statements.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

(Dollars in Thousands)

OVERVIEW

The Company operates a chain of 23 ShopRite supermarkets in New Jersey and eastern Pennsylvania. The Company is the second largest member of Wakefern Food Corporation (“Wakefern”), the nation’s largest retailer-owned food cooperative. As further described in the Company’s Form 10-K, this ownership interest in Wakefern provides the Company many of the economies of scale in purchasing, distribution, advanced retail technology and advertising associated with larger chains.

The Company’s stores, five of which are owned, average 55,000 total square feet. Larger store sizes enable the Company to offer the specialty departments that customers desire for one-stop shopping, including pharmacies, natural and organic departments, ethnic and international foods, and home meal replacement. On October 27, 2004, the Company opened an 80,000 square foot store in Somers Point, New Jersey to replace a smaller store.

We consider a variety of indicators to evaluate our performance, such as same store sales; sales per store; percentage of total sales by department (mix); shrink; departmental gross profit percentage; sales per labor hour; and hourly labor rates. In recent years, the Company, as well as many of our competitors, has faced increases in employee health and pension costs under union contracts and for non-union associates. In addition, rates charged by utilities for electric and gas increased in fiscal 2005 and 2004, and that trend continues in fiscal 2006.

RESULTS OF OPERATIONS

Sales. Sales were $266,038 in the second quarter of fiscal 2006, an increase of 3.9% from the second quarter of the prior year. Same store sales increased 4.2% due to improved sales in the recently remodeled Bernardsville and Springfield stores and higher sales in one store due to the closing of a competitor’s store. These same store sales improvements were partially offset by reduced sales in one store due to a competitive store opening. Same stores sales increased more than sales due to the closing of a stand-alone drug store in the prior fiscal year. New stores and replacement stores are included in same store sales in the quarter after the store has been in operation for four full quarters. Store renovations are included in same store sales immediately. The Somers Point replacement store, which opened October 27, 2004, is included in same store sales beginning in the second quarter of fiscal 2006.

Sales were $509,483 for the six-month period of fiscal 2006, an increase of 3.3% from the prior year. Same stores sales increased 3.2% due to improved sales in the recently remodeled Bernardsville and Springfield stores and higher sales in one store due to the closing of a competitor’s store. These same store sales improvements were partially offset by reduced sales in two stores due to competitive store openings.

Gross Profit. Gross profit as a percentage of sales increased to 25.9% in the second quarter of fiscal 2006 compared to 25.6% in the second quarter of the prior year. As a percentage of sales, gross profit increased primarily due to improved product mix, higher gross margins in most departments and reduced warehousing and related charges from Wakefern (.05%).

Gross profit as a percentage of sales increased to 26.0% for the six-month period of fiscal 2006 compared to 25.4% in the corresponding period of the prior year. As a percentage of sales, gross profit increased primarily due to improved product mix, higher gross margins in most departments, and reduced warehousing and related charges from Wakefern (.07%).

Operating and Administrative Expense. Operating and administrative expense as a percentage of sales decreased to 21.8% in the second quarter of fiscal 2006 compared to 21.9% in the second quarter of the prior year. As a percentage of sales, operating and administrative expense decreased primarily due to a reversal of an accrual for future lease obligations of a closed stand-alone drug store in the current fiscal year (see Note 8) compared to a charge in the prior year (.26%), decreased advertising (.06%) and decreased occupancy costs (.05%). These decreases were partially offset by higher fringe benefit costs (.23%) and utility costs (.12%). Fringe benefit costs increased primarily due to increased expense for employee pension plans and compensation costs recognized under share-based compensation plans. Utility costs increased primarily due to higher energy prices.

Operating and administrative expense as a percentage of sales increased to 22.2% in the six-month period of fiscal 2006 compared to 22.0% in the corresponding period of the prior year. As a percentage of sales, operating and administrative expense increased primarily due to higher fringe benefit costs (.27%), utility costs (.11%) and amounts accrued related to a non-income tax state audit (.11%). These increases were partially offset by a reversal of an accrual for future lease obligations of a closed stand-alone drug store in the current fiscal year (see Note 8) compared to a charge in the prior year (.13%), a gain on the sale of assets (.09%) and lower occupancy costs (.07%). Fringe benefit costs increased primarily due to increased expense from employee pension plans and compensation costs recognized under share-based compensation plans. Utility costs increased primarily due to higher energy prices.

Depreciation and Amortization. Depreciation and amortization expense increased in the second quarter and six-month periods of fiscal 2006 compared to the corresponding periods of the prior year due to depreciation on the fixed asset additions related to the expansion and remodels of the Bernardsville and Springfield stores and the Somers Point replacement store.

Interest Expense, net. Interest expense, net of interest income, decreased in the second quarter and six-month periods of fiscal 2006 compared to the corresponding periods of the prior year due to increased interest income from both higher rates received on excess cash invested at Wakefern and increased amounts invested, and lower interest expense due to debt payments.

Income from Partnership. The Company is a limited partner in a real estate partnership that sold its only asset and distributed the proceeds to the partners in the second quarter of fiscal 2005. The Company received proceeds of $3,096 and recorded income from the partnership of $1,509 ($890 after tax), which is the excess of the proceeds above the Company’s investment in the partnership and certain receivables due from the partnership.

Income Taxes. The effective income tax rate was 41.7% in both the second quarter and six-month periods of fiscal 2006 compared to 41.0% in both the corresponding periods of the prior year. The Company estimates the annual effective income tax rate for fiscal 2006 at 41.7%.

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. These policies 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 Company’s critical accounting policies relating to the impairment of long-lived assets and goodwill, 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 30, 2005. As of January 28, 2006, there have been no changes to any of the critical accounting policies contained therein.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $23,649 in the six-month period ended January 28, 2006 compared with $17,673 in the corresponding period of the prior year. This increase is primarily attributable to an increase in accounts payable and accrued expenses in the current fiscal year due to the timing of payments.

During the first six months of fiscal 2006, the Company used cash provided by operating activities to fund capital expenditures of $6,309, debt payments of $5,747 and dividends of $1,779. Major capital expenditures were the expansion and remodel of the Springfield store and smaller remodels of the Elizabeth and Chester stores. Debt payments made include the third installment of $4,286 on the Company’s unsecured Senior Notes.

Working capital was $37,999 at January 28, 2006 compared to $36,314 at July 30, 2005. The working capital ratio was 1.50 to 1 at January 28, 2006 compared to 1.52 to 1 at July 30, 2005. The Company’s working capital needs are reduced, since inventory is generally sold by the time payments to Wakefern and other suppliers are due.

The Company has budgeted approximately $12,000 for capital expenditures in fiscal 2006. These expenditures include the completed expansion and remodel of the Springfield store, and the beginning of remodels of the Morris Plains and Rio Grande stores. The Company’s primary sources of liquidity in fiscal 2006 are expected to be cash and cash equivalents on hand and operating cash flow generated in fiscal 2006.

There have been no substantial changes as of January 28, 2006 to the contractual obligations discussed on page 7 of the Company’s Annual Report on Form 10-K for the year ended July 30, 2005.

RELATED PARTY TRANSACTIONS

A description of the Company’s transactions with Wakefern, its principal supplier, and with other related parties is included on pages 7, 8, 16, 19 and 20 of the Company’s Annual Report on Form 10-K for the year ended July 30, 2005. There have been no significant changes in the Company’s relationship or nature of the transactions with these related parties during the six months of fiscal 2006.

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; the success of operating initiatives; consumer spending patterns; the impact of higher energy prices; increased cost of goods sold, including increased costs from the Company’s principal supplier, Wakefern; the results of union contract negotiations; competitive store openings; the rate of return on pension assets; and other factors detailed herein and in other public filings of the Company.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks arising from adverse changes in interest rates. As of January 28, 2006, the Company’s only variable rate borrowings relate to an interest rate 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% (8.15% at January 28, 2006) on an initial notional amount of $10,000 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 28, 2006 the remaining notional amount of the swap agreement was $5,714. A 1% increase in interest rates, applied to the Company’s borrowings at January 28, 2006, would result in an annual increase in interest expense and a corresponding reduction in cash flow of approximately $57. The fair value of the Company’s fixed rate debt is also affected by changes in interest rates.

At January 28, 2006, the Company had demand deposits of $56,900 at Wakefern earning interest at prime less 2.5%, or overnight money market rates, which are 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.

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.

There have been no significant changes in internal controls over financial reporting during the second quarter of fiscal 2006.

PART II - OTHER INFORMATION

Item 6. Exhibits

	Exhibit 28(a)	Press Release dated March 8, 2006

	Exhibit 28(b)	First Quarter Report to Shareholders dated December 13, 2005

	Exhibit 31.1	Certification

	Exhibit 31.2	Certification

	Exhibit 32.1	Certification (furnished, not filed)

	Exhibit 32.2	Certification (furnished, not filed)

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 8, 2006	/s/ James Sumas
	James Sumas
	(Chief Executive Officer)


Date: March 8, 2006	/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 28, 2006

Contact:	Kevin Begley, CFO
	(973) 467-2200 - Ext. 220
	Kevin.Begley@wakefern.com

Springfield, New Jersey - March 8, 2006 - Village Super Market, Inc. (NSD-VLGEA) today reported its results of operations for the second quarter ended January 28, 2006.

Net income was $4,447,000 ($1.38 per diluted share) in the second quarter of fiscal 2006 compared to $4,357,000 in the second quarter of the prior year. Results for the second quarter of the prior year include $890,000 (after-tax) of income received from a partnership. Excluding this partnership income, net income in the second quarter of fiscal 2006 increased 28% from the pro forma net income in the second quarter of the prior year of $3,467,000. Net income increased primarily due to improved sales and gross profit percentages.

Sales were $266,038,000 in the second quarter of fiscal 2006, an increase of 3.9% from the second quarter of the prior year. Same store sales increased 4.2% due to improved sales in the recently remodeled Bernardsville and Springfield stores and improved sales in one store due to the closing of a competitor’s store. These same store sales improvements were partially offset by reduced sales in one store due to a competitive store opening. Same store sales increased more than sales due to the closing of a stand-alone drug store in the prior fiscal year.

Net income for the six-month period of fiscal 2006 was $7,414,000 ($2.29 per diluted share) compared with $7,044,000 in the prior year. Excluding the income received from the partnership in the prior year described above, net income for the first six months of fiscal 2006 increased 20% from the prior year. Sales for the six-month period of fiscal 2006 were $509,483,000, an increase of 3.3% from the prior year. Same store sales increased 3.2% in the six-month period of fiscal 2006 compared to the prior year.

Village Super Market operates a chain of 23 supermarkets under the ShopRite name in New Jersey and eastern Pennsylvania.

All statements, other than statements of historical fact, included in this Press Release 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; the success of operating initiatives; consumer spending patterns; the impact of higher energy prices; increased cost of goods sold, including increased costs from the Company’s principal supplier, Wakefern; 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 OPERATIVE

(Dollars in Thousands Except Per Share Amounts)

(Unaudited)

	13 Wks. Ended			13 Wks. Ended			26 Wks. Ended			26 Wks. Ended
	Jan. 28, 2006			Jan. 29, 2005			Jan. 28, 2006			Jan. 29, 2005

Sales	$	266,038		$	255,992		$	509,483		$	493,344

Cost of sales		197,106			190,570			377,142			368,048

Gross profit		68,932			65,422			132,341			125,296

Operating and administrative expense		58,091			56,122			113,181			108,679

Depreciation and amortization		2,863			2,779			5,665			5,160


Operating income		7,978			6,521			13,495			11,457

Interest expense, net		350			646			778			1,027

Income from partnership		----			1,509			----			1,509

Income before income taxes		7,628			7,384			12,717			11,939

Income taxes		3,181			3,027			5,303			4,895

Net income	$	4,447		$	4,357		$	7,414		$	7,044

Net income per share:
Basic	$	1.40		$	1.38		$	2.33		$	2.23
Diluted	$	1.38		$	1.37		$	2.29		$	2.21

Gross profit as a % of sales		25.9	%		25.6	%		26.0	%		25.4	%

Operating and Administrative expense as a % of sales		21.8	%		21.9	%		22.2	%		22.0	%

VILLAGE SUPER MARKET, INC.

EXECUTIVE OFFICES

733 Mountain Avenue

Springfield, New Jersey 07081

Phone: (973) 467-2200

Fax: (973) 467-6582

To Our Shareholders

Net income was $2,968,000 ($.92 per diluted share) in the first quarter of fiscal 2006, an increase of 10% from the first quarter of the prior year. Net income increased primarily due to improved sales and gross profit percentages, partially offset by increased operating expenses.

Sales were $243,445,000 in the first quarter of fiscal 2006, an increase of 2.6% from the first quarter of the prior year. Sales increased due to the opening of an 80,000 sq. ft. replacement store in Somers Point, New Jersey on October 27, 2004 and a same store sales increase of 2.0%. Same store sales increased due to improved sales in the recently remodeled Bernardsville and Springfield stores and improved sales in one store due to the closing of a competitor’s store. These same store sales improvements were partially offset by reduced sales in certain stores due to competitive store openings.

Gross profit as a percentage of sales increased to 26.0% in the first quarter of fiscal 2006 compared to 25.2% in the first quarter of the prior year. As a percentage of sales, gross profit increased primarily due to improved product mix, higher gross margins in most departments and reduced warehousing and related charges from Wakefern (.10%).

Operating and administrative expense as a percentage of sales increased to 22.6% in the first quarter of fiscal 2006 compared to 22.1% in the first quarter of the prior year. As a percentage of sales, operating and administrative expense increased primarily due to higher fringe benefit costs (.31%), utility costs (.10%), supply costs (.07%) and amounts accrued related to a non-income tax state audit (.23%). These increases were partially offset by a gain on the sale of assets (.17%). Fringe benefit costs increased primarily due to increased expense for employee health and pension plans and compensation costs recognized under share-based compensation plans. Utility and supply costs increased primarily due to higher energy prices.

On December 9, 2005, the Board of Directors declared a 9% increase in the semi-annual cash dividend. The increased semi-annual dividend of $.35 per Class A common share and $.228 per Class B common share will be payable January 26, 2006 to shareholders of record on December 30, 2005.

	Respectfully,

Perry Sumas		James Sumas
President		Chairman of the Board

December 13, 2005

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; the success of operating initiatives; consumer spending patterns; the impact of higher energy prices; 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 OPERATIONS

(in Thousands Except Per Share Amounts)

	13 Weeks Ended			13 Weeks Ended
	October 29, 2005			October 30, 2004

Sales	$	243,445		$	237,352

Cost of sales		180,036			177,478

Gross profit		63,409			59,874

Operating and administrative expense		55,090			52,557

Depreciation and amortization		2,802			2,381

Operating income		5,517			4,936

Interest expense, net		427			381

Income before income taxes		5,090			4,555

Income taxes		2,122			1,868

Net income	$	2,968		$	2,687

Net income per share:
Basic	$	.93		$	.85
Diluted	$	.92		$	.85

Gross profit as a % of sales		26.0	%		25.2	%

Operating and administrative expense as a % of sales		22.6	%		22.1	%

Exhibit 31.1

I, James Sumas, certify that:

I have reviewed this quarterly report on Form 10-Q of Village Super Market, Inc.;

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;

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.

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:

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;

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

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

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):

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

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 8, 2006	/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:

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;

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):

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 8, 2006	/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 28, 2006 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.

March 8, 2006	/s/ James Sumas
	James Sumas
	Chief Executive Officer

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 28, 2006 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.

March 8, 2006	/s/ Kevin Begley
	Kevin Begley
	Chief Financial Officer &
	Principal Accounting Officer