-----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, KdCn7oNQ9jJtTPtNy2qajGRuKOX2c48zDc2jXdAlnxsHdK1SGaHyYA1DOT5RAxZq AbaBmaHYotOAyyGi2+F0LA== 0000037914-99-000005.txt : 19990615 0000037914-99-000005.hdr.sgml : 19990615 ACCESSION NUMBER: 0000037914-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990501 FILED AS OF DATE: 19990611 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOODARAMA SUPERMARKETS INC CENTRAL INDEX KEY: 0000037914 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 210717108 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05745 FILM NUMBER: 99644826 BUSINESS ADDRESS: STREET 1: 922 HIGHWAY 33 STREET 2: BLDG 6 CITY: FREEHOLD STATE: NJ ZIP: 07728 BUSINESS PHONE: 732-462-4700 MAIL ADDRESS: STREET 1: 922 HIGHWAY 33 STREET 2: BLDG 6 CITY: FREEHOLD STATE: NJ ZIP: 07728 10-Q 1 QUARTERLY PERIOD ENDED MAY 1, 1999 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly period ended May 1, 1999 Commission file number 1-5745-1 FOODARAMA SUPERMARKETS, INC. (Exact name of registrant as specified in its charter) New Jersey 21-0717108 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 922 Highway 33, Freehold, N.J. 07728 (Address of principal executive offices) Telephone #732-462-4700 (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 and (2) has been subject to the filing requirements for at least the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date. OUTSTANDING AT CLASS June 4,1999 Common Stock 1,117,150 shares $1 par value FOODARAMA SUPERMARKETS, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Unaudited Consolidated Balance Sheets May 1, 1999 and October 31, 1998 Unaudited Consolidated Statements of Operations for the thirteen weeks ended May 1, 1999 and May 2, 1998 Unaudited Consolidated Statements of Operations for the twenty six weeks ended May 1, 1999 and May 2, 1998 Unaudited Consolidated Statements of Cash Flows for the twenty six weeks ended May 1, 1999 and May 2, 1998 Notes to the Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Certain information included in this report and other Registrant filings (collectively, "SEC filings") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (as well as information communicated orally or in writing between the dates of such SEC filings) contain or may contain forward-looking information that is (i) based upon assumptions which, if changed, could produce significantly different results; or (ii) subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are matters related to national and local economic conditions, the effect of certain governmental regulations and programs on the Registrant, year 2000 issues related to computer applications and competitive conditions in the marketplace in which the Registrant operates. The forward-looking statements are made as of the date of this Form 10-Q and the Registrant assumes no obligation to update the forward-looking statements or to update the reasons actual results could differ from those projected in such forward-looking statements. See "Management's Discussion and Analysis of Financial Condition and Results of Operation." 2 PART I FINANCIAL INFORMATION FOODARAMA SUPERMARKETS, INC AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) May 1, October 31, 1999 1998 (Unaudited) (1) ASSETS Current assets: Cash and cash equivalents $ 3,980 $ 3,905 Merchandise inventories 39,311 37,804 Receivables and other current assets 4,002 3,382 Prepaid income taxes 890 1,005 Related party receivables - Wakefern 4,438 6,860 Related party receivables - other 130 152 -------- -------- 52,751 53,108 -------- -------- Property and equipment: Land 308 308 Buildings and improvements 1,220 1,220 Leaseholds and leasehold improvements 34,890 34,031 Equipment 78,735 75,756 Property under capital leases 38,218 32,353 -------- -------- 153,371 143,668 Less accumulated depreciation and amortization 70,852 65,389 -------- -------- 82,519 78,279 -------- -------- Other assets: Investments in related parties 10,992 9,706 Intangibles 4,200 4,562 Other 2,854 2,384 Related party receivables - Wakefern 1,462 1,370 Related party receivables - other 117 158 -------- -------- 19,625 18,180 -------- -------- $154,895 $149,567 ======== ======== (continued) (1) Derived from the Audited Consolidated Financial Statements for the year ended October 31, 1998. See accompanying notes to consolidated financial statements. 3 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands except share data) May 1, October 31, 1999 1998 (Unaudited) (1) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 15,554 $ 7,812 Current portion of long-term debt, related party 517 211 Current portion of obligations under capital leases 468 667 Deferred income tax liability 1,464 1,464 Accounts payable: Related party-Wakefern 28,514 30,525 Others 6,926 6,446 Accrued expenses 9,620 8,708 --------- --------- 63,063 55,833 ---------- ---------- Long-term debt 10,741 20,289 Long-term debt, related party 1,701 916 Obligations under capital leases 35,280 29,451 Deferred income taxes 3,634 3,508 Other long-term liabilities 6,550 6,556 ---------- ---------- 57,906 60,720 ---------- ---------- Shareholders' equity: Common stock, $1.00 par; authorized 2,500,000 shares; issued 1,621,627 shares; Outstanding 1,117,150 shares 1,622 1,622 Capital in excess of par 2,351 2,351 Retained earnings 36,663 35,751 Accumulated comprehensive income: Minimum pension liability adjustment (81) (81) --------- --------- 40,555 39,643 Less 504,477 shares held in treasury, at cost 6,629 6,629 ---------- --------- 33,926 33,014 ---------- --------- $ 154,895 $ 149,567 ========== ========= (1) Derived from the Audited Consolidated Financial Statements for the year ended October 31, 1998. See accompanying notes to consolidated financial statements. 4 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Unaudited (in thousands - except share data) 13 Weeks Ended May 1 May 2, 1999 1998 ----------- ------------ Sales $ 195,420 $ 166,245 Cost of merchandise sold 143,696 123,820 ----------- ----------- Gross profit 51,724 42,425 Operating, general and administrative expenses 49,835 41,304 ----------- ----------- Income from operations 1,889 1,121 ----------- ----------- Other (expense) income: Interest expense (1,420) (889) Interest income 98 159 ----------- ----------- (1,322) (730) ----------- ----------- Income before taxes 567 391 Income tax provision (190) (133) ----------- ----------- Net income $ 377 $ 258 =========== =========== Per share information: Net income per common share, basic and diluted $ .34 $ .23 =========== =========== Weighted average number of common shares outstanding 1,117,150 1,117,150 =========== =========== Dividends per common share -0- -0- See accompanying notes to consolidated financial statements. 5 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Unaudited (in thousands - except share data) 26 Weeks Ended May 1, May 2, 1999 1998 ----------- ------------ Sales $ 399,027 $ 336,476 Cost of merchandise sold 294,426 251,617 ----------- ----------- Gross profit 104,601 84,859 Operating, general and administrative expenses 100,554 81,649 ----------- ----------- Income from operations 4,047 3,210 ----------- ----------- Other (expense) income: Interest expense (2,816) (1,849) Interest income 151 217 ----------- ----------- (2,665) (1,632) Income before taxes 1,382 1,578 Income tax provision (470) (537) ----------- ----------- Net income $ 912 $ 1,041 =========== =========== Per share information: Net income per common share, basic and diluted $ .82 $ .93 =========== =========== Weighted average number of common shares outstanding 1,117,150 1,117,150 =========== =========== Dividends per common share -0- -0- See accompanying notes to consolidated financial statements. 6 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows - Unaudited (in thousands) 26 Weeks Ended May 1, May 2, 1999 1998 Cash flows from operating activities: Net income $ 912 $ 1,041 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 5,463 3,879 Amortization, intangibles 362 269 Amortization, deferred financing costs 212 326 Amortization, deferred rent escalation ( 131) 133 Deferred income taxes (benefit) 126 (135) (Increase) decrease in Merchandise inventories (1,507) (2,471) Receivables and other current assets ( 620) ( 252) Prepaid income taxes 115 312 Other assets ( 682) 702 Related party receivables-Wakefern 2,330 2,086 Increase (decrease) in Accounts payable (1,531) 4,930 Other liabilities 1,037 544 --------- --------- 6,086 11,364 Cash flows from investing activities: Cash paid for the purchase of property and equipment (3,311) (7,492) Cash paid for construction in progress (1,000) Decrease(increase) in related party receivables-other 63 ( 64) ---------- --------- (3,248) (8,556) Cash flows from financing activities: Proceeds from issuance of debt 1,663 3,894 Principal payments under long-term debt (3,996) (6,194) Principal payments under capital lease obligations ( 235) ( 207) Principal payments under long-term debt, related party ( 195) ( 40) --------- --------- (2,763) (2,547) NET INCREASE IN CASH AND CASH EQUIVALENTS 75 261 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,905 3,678 --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,980 $ 3,939 ========- ========= See accompanying notes to consolidated financial statements. 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 Basis of Presentation The unaudited Consolidated Financial Statements as of or for the period ending May 1, 1999, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and rule 10-01. The balance sheet at October 31, 1998 has been taken from the audited financial statements at that date. In the opinion of the management of the Registrant, all adjustments (consisting only of normal recurring accruals) which the Registrant considers necessary for a fair presentation of the results of operations for the period have been made. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The reader is referred to the consolidated financial statements and notes thereto included in the Registrant's annual report on Form 10-K for the year ended October 31, 1998. Certain reclassifications have been made to prior year financial statements in order to conform to the current year presentation. These results are not necessarily indicative of the results for the entire fiscal year. Note 2 Adoption of Accounting Standards Reporting Comprehensive Income Effective November 1, 1998, the Registrant adopted Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income". This Statement establishes standards for reporting and display of comprehensive income and its components (revenue, expenses, gains and losses) in a full set of general-purpose financial statements. This Statement requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. There was no material impact from adopting the provisions of SFAS No. 130 in the quarter ended May 1, 1999. There were no comprehensive income items during the quarter ended May 1, 1999. Disclosure about Segments of an Enterprise and Related Information Effective November 1, 1998 the Registrant adopted SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information." This Statement establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. There was no material impact from adopting the provisions of SFAS No. 131 in the quarter ended May 1, 1999. 8 Part I - Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition and Liquidity The Registrant is a party to an Amended and Restated Revolving Credit and Term Loan Agreement ("the Credit Agreement") with one financial institution. The Credit Agreement is secured by substantially all of the Registrant's assets and provided for a total commitment of $34,200,000, including a revolving credit facility of up to $20,000,000 (increased from $17,500,000 on March 15, 1999) and term loans referred to as Term Loan C in the amount of $11,000,000, the Stock Redemption Facility in the amount of $1,700,000 and the Expansion Loan in the amount of $1,500,000. As of May 1, 1999 the Registrant owed $3,500,000 on Term Loan C, $1,275,000 on the Stock Redemption Facility and $1,287,500 on the Expansion Loan. Term Loan C and the Stock Redemption Facility are to be paid quarterly through December 31, 1999 with final payments of $500,000 and $1,020,000, respectively, on February 15, 2000. The revolving credit facility also matures February 15, 2000 and the Expansion Loan is payable in monthly installments over its seven year term based on a ten year amortization, with a final payment of $462,500 payable December 1, 2004. Interest rates are fixed on Term Loan C and the Stock Redemption Facility at 8.38% and on the Expansion Loan at 9.18%. The interest rate on the revolving credit facility floats at the Base Rate (defined below) plus .25%. The Base Rate is the rate which is the greater of (i) the bank prime loan rate as published by the Board of Governors of the Federal Reserve System, or (ii) the Federal Funds rate, plus .50%. Additionally, the Registrant has the ability to use the London Interbank Offered Rate ("LIBOR") plus 2.25% to determine the interest rate on the revolving credit facility. The Credit Agreement contains certain affirmative and negative covenants which, among other matters, will require the maintenance of a debt service coverage ratio. The Registrant's compliance with the major financial covenant under the Credit Agreement was as follows as of May 1, 1999. Actual Financial Credit (As defined in the Covenant Agreement Credit Agreement) Debt Service Coverage Ratio Not less than 1.00 to 1.00 .71 to 1.00 Although the Debt Service Coverage Ratio (the "Ratio") is below the level required by the Credit Agreement, the Credit Agreement provides a second criteria, if the Ratio is not met, before a default is deemed to have occurred. Under this criteria, at all times when the Ratio is less than 1.00 to 1.00, the amount available and undrawn on the revolving credit facility must equal or exceed $2,500,000 which, in turn will mean that in order to remain in compliance with this covenant, the Registrant cannot borrow the last $2,500,000 of funds available under the revolving credit facility. After giving effect to this restriction on borrowing, the Registrant had $8,021,000 of available credit at May 1, 1999, under its revolving credit facility. 9 No cash dividends have been paid on the Common Stock since 1979, and the Registrant has no present intentions or ability to pay any dividends in the near future on its Common Stock. The Credit Agreement does not permit the payment of any cash dividends on the Registrant's Common Stock. Year 2000 In 1997, the Registrant appointed a year 2000 task force (the "Task Force") to review all aspects of the Registrant's operations relating to Year 2000 ("Y2K") issues. The Task Force reports to the Registrant's Chief Financial Officer and is staffed primarily with representatives of the Registrant's Information Technology and Store Systems departments. Reports are made regularly to the Registrant's Board of Directors. The Task Force is participating with Wakefern Food Corporation ("Wakefern") in the inventory and assessment of jointly operated store systems for Y2K readiness. The Task Force and Wakefern, where involved, have identified all computer-based systems and applications (including embedded chip systems) the Registrant uses or that affect its operations that might not be Y2K compliant. Those systems and equipment which are not Y2K compliant have been, or will be, modified, reprogrammed or replaced. The Registrant estimates that all critical systems and applications will be Y2K compliant by the fourth quarter of fiscal 1999. The costs related to the Y2K project are included in the normal operating and capital budgets of both the Registrant's and Wakefern's Information Technology Departments' budgets and should not have any material effect on the Registrant's operating results. Both the Registrant and Wakefern are in the process of developing contingency plans to provide for viable alternatives to ensure that business operations are able to continue in the event of Y2K related system failures. The most significant impacts would likely be the inability to conduct normal operations due to a power failure at store level or at Wakefern or a systems failure in the banking process either at the local, federal or electronic payment level. If the Registrant, Wakefern or third party vendors are unable to resolve these issues in a timely manner, the failure of these systems could result in the interruption of the Registrant's operations, which could have a material adverse effect on the operating results and financial condition of the Registrant. Working Capital At May 1, 1999, the Registrant had a working capital deficiency of $10,312,000 compared to a deficiency of $2,725,000 at October 31, 1998 and $2,532,000 at May 2, 1998. The decline in working capital from October 31, 1998 was primarily due to the reclassification of the Revolving Note from long term to current debt. This reclassification was necessary since the loan facility matures in less than one year. 10 The Registrant normally requires small amounts of working capital since inventory is generally sold at approximately the same time that payments to Wakefern and other suppliers are due and most sales are for cash or cash equivalents. Working capital ratios were as follows: May 1, 1999 .84 to 1.0 October 31, 1998 .95 to 1.0 May 2, 1998 .95 to 1.0 Cash flows (in millions) were as follows: 5/01/99 5/02/98 Operating activities... $ 6.1 $11.4 Investing activities... (3.2) (8.6) Financing activities... (2.8) (2.5) ------ ------ Totals $ 0.1 $ 0.3 ====== ====== The Registrant had $8,021,000 of available credit, at May 1, 1999, under its revolving credit facility. The March 15, 1999 amendment to the revolving credit facility increasing the amount available thereunder from $17,500,000 to $20,000,000 is expected to provide the Registrant with working capital adequate to meet its needs for the balance of the fiscal year. The Registrant is presently negotiating the terms and conditions of a new credit agreement with several financial institutions. A new credit facility is expected to allow the Registrant to more adequately meet its operating needs, scheduled capital expenditures and debt service during fiscal 2000 and thereafter. For the twenty six weeks ended May 1, 1999 depreciation was $5,463,000 while capital expenditures totaled $3,838,000, compared to $3,879,000 and $8,098,000 respectively in the prior year period. The increase in depreciation was caused by the addition of two new locations and one additional capital lease in fiscal 1998 and the modification of a capital lease in fiscal 1999. Results of Operations (13 weeks ended May 1, 1999 compared to 13 weeks ended May 2, 1998) Sales: Same store sales from the nineteen stores in operation in both periods increased 9.4%. Sales for the current period totaled $195.4 million as compared to $166.2 million in the prior year period. A significant increase in promotional activities, including a variety of incentive programs and double couponing, in the current period contributed to this increase. Sales for the current quarter included the operations of two new locations opened in February and August 1998. The location opened in February 1998 replaced an older, smaller store. 11 Gross Profit: Gross profit as a percent of sales increased to 26.5% of sales compared to 25.5% in the prior year period. Patronage dividends, applied as a reduction of the cost of merchandise sold, were $1.3 million in the current period compared to $1.2 million in the prior year period. Gross profit improved as a result of improved product mix, increased patronage dividends, reduced Wakefern assessment as a percentage of sales and Wakefern incentive programs for the new locations. Operating Expenses: Operating, general and administrative expenses as a percent of sales were 25.5% versus 24.8% in the prior year period. The increase in operating, general and administrative expenses as a percent of sales was primarily due to increases in certain expense categories as a percentage of sales. As a percentage of sales, selling expense increased 1.66% and other store expenses, which include debit and credit card processing fees and Wakefern support services, increased .11%. The increase in selling expense was the result of increased promotional activity, including a variety of incentive programs and double couponing, in the Registrant's marketing area. These increases were partially offset by decreases in labor and related fringe benefits of .35%, supplies of .15%, occupancy of .09%, pre-store opening costs of .17%, corporate administrative expense of .13% and an increase in miscellaneous income of .09%. Interest Expense: Interest expense increased to $1,420,000 from $889,000, while interest income was $98,000 compared to $159,000 for the prior period. The increase in interest expense for the current year period was due to an increase in average outstanding debt, including increased capitalized lease obligations, since May 2, 1998 partially offset by a decrease in the average interest rate paid on debt. Income Taxes: An income tax rate of 34% has been used in both the current and prior year periods based on the expected effective tax rate. Net Income: Net income was $377,000 in the current year period compared to $258,000 in the prior year period. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the current period were $4,937,000 as compared to $3,434,000 in the prior year period. Net income per common share was $.34 in the current period compared to $.23 in the prior year period. Per share calculations are based on 1,117,150 shares outstanding in both periods. 12 Results of Operations (26 weeks ended May 1, 1999 compared to 26 weeks ended May 2, 1998) Sales: Same store sales from the nineteen stores in operation in both periods increased 8.7%. Sales for the current twenty six week period totaled $399.0 million as compared to $336.5 million in the prior year period. A significant increase in promotional activities, including a variety of incentive programs and double couponing, in the current period contributed to this increase. Sales for the current twenty six week period included the operations of two new locations opened in February and August 1998. The location opened in February 1998 replaced an older, smaller store. Gross Profit: Gross profit as a percent of sales increased to 26.2% of sales compared to 25.2% in the prior year period. Patronage dividends, applied as a reduction of the cost of merchandise sold, were $2.7 million in the current period compared to $2.3 million in the prior year period. Gross profit improved as a result of improved product mix, increased patronage dividends, reduced Wakefern assessment as a percentage of sales and Wakefern incentive programs for the new locations. Operating Expenses: Operating, general and administrative expenses as a percent of sales were 25.2% versus 24.3% in the prior year period. The increase in operating, general and administrative expenses as a percent of sales was primarily due to increases in certain expense categories as a percentage of sales. As a percentage of sales, selling expense increased 1.62% and other store expenses, which include debit and credit card processing fees and Wakefern support services, increased .12%. The increase in selling expense was the result of increased promotional activity, including a variety of incentive programs and double couponing, in the Registrant's marketing area. These increases were partially offset by decreases in labor and related fringe benefits of .32%, supplies of .09%, occupancy of .05%, pre-store opening costs of .09%, corporate administrative expense of .19% and an increase in miscellaneous income of .12%. Interest Expense: Interest expense increased to $2,816,000 from $1,849,000, while interest income was $151,000 compared to $217,000 for the prior period. The increase in interest expense for the current year period was due to an increase in average outstanding debt, including increased capitalized lease obligations, since May 2, 1998 partially offset by a decrease in the average interest rate paid on debt. 13 Income Taxes: An income tax rate of 34% has been used in both the current and prior year periods based on the expected effective tax rate. Net Income: Net income was $912,000 in the current year period compared to $1,041,000 in the prior year period. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the current period were $9,953,000 as compared to $7,817,000 in the prior year period. Net income per common share, both basic and diluted, was $.82 in the current period compared to $.93 in the prior year period. Per share calculations are based on 1,117,150 shares outstanding in the both periods. 14 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit (27) - Financial Data Schedule. Exhibit (99) - Amendment to the Amended and Restated Revolving Credit and Term Loan Agreement dated March 11, 1999 and amended Schedule 2.01 and the Second Amended and Restated Revolving Note Exhibit A thereto. (b) No reports on Form 8-K were required to be filed for the 13 weeks ended May 1, 1999. 15 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. FOODARAMA SUPERMARKETS, INC. (Registrant) Date: June 11, 1999 /S/ MICHAEL SHAPIRO ----------------------------- (Signature) Michael Shapiro Senior Vice President Chief Financial Officer Date: June 11, 1999 /S/ JOSEPH C. TROILO ----------------------------- (Signature) Joseph C. Troilo Senior Vice President Principal Accounting Officer 16 EXHIBIT 99 HELLER FINANCIAL, INC. 500 West Monroe Street Chicago, Illinois 60661 March ___, 1999 Foodarama Supermarkets, Inc. 922 Highway 33, Building 6, Suite 1 Freehold, New Jersey 07728 Gentlemen: Reference is made to that certain Amended and Restated Revolving Credit and Term Loan Agreement dated as of May 2, 1997 (as amended, restated, modified or supplemented from time to time, the "Loan Agreement") by and among FOODARAMA SUPERMARKETS, INC. ("Foodarama"), NEW LINDEN PRICE RITE, INC., SHOP RITE OF READING, INC., SHOP RITE OF MALVERNE, INC., HELLER FINANCIAL, INC. ("Heller"), the various other financial institutions named therein or which hereafter become a party thereto (Heller and such other financial institutions, collectively, the "Lenders") and Heller as agent for the Lenders (Heller in such capacity, "Agent"). All capitalized terms used herein shall have the meanings ascribed thereto in the Loan Agreement. You have requested that Agent, on behalf of Lenders, increase the amount of the revolving credit facility under the Loan Agreement, and Agent, on behalf of Lenders is willing to do so on the terms and conditions set forth herein. Subject to Agent's receipt of (a) the Second Amended and Restated Revolving Credit Note (the "Amended Note") duly executed by Borrowers, and (b) resolutions of each Borrower duly authorizing the execution, delivery and performance of the transactions contemplated by this letter agreement, which resolutions shall be certified by the Secretary or Assistant Secretary of such Borrower, the parties hereto agree that the Loan Agreement is hereby amended as follows: (a) Schedule 2.01 is hereby replaced with Schedule 2.01 to this letter agreement; and (b) Exhibit A is hereby replaced with Exhibit A to this letter agreement. Except as expressly provided herein, the execution, delivery and effectiveness of this letter shall not operate as a waiver of any right, power or remedy of Agent or any Lender, nor constitute a waiver of any provision of the Loan Agreement, the Loan Documents or any other documents, instruments or agreements executed and/or delivered thereunder or in connection therewith and the Loan Agreement, the Loan Documents and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed. This letter may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement. By its signature below, each Borrower hereby represents and warrants to Agent and Lenders that (a) it has the requisite corporate power to execute, deliver and perform its obligations under this letter, to borrow the additional loans under the revolving credit facility and to execute and deliver the Amended Note and (b) no consent of any Person (including any party to an intercreditor, subordination or similar agreement) is necessary in order for such Borrower to execute, deliver and perform its obligations under this letter or the Amended Note. If you are in agreement with the foregoing, kindly execute and have the other Borrowers and Guarantors execute this letter in the space provided below and return same to the undersigned. Sincerely, HELLER FINANCIAL, INC., as Agent and as a Lender By:______________________ Name: Title: CONSENTED AND AGREED TO: FOODARAMA SUPERMARKETS, INC., as Parent and as Guarantor By:_____________________________ Name: Title: NEW LINDEN PRICE RITE, INC., as Borrower and as Guarantor By:_____________________________ Name: Title: SHOP RITE OF READING, INC., as Borrower and as Guarantor By:_____________________________ Name: Title: SHOP RITE OF MALVERNE, INC., as Guarantor By:_____________________________ Name: Title: Schedule 2.01 Heller Financial, Inc., as Agent Revolving Loan Commitment: $20,000,000 Term Loan Commitment: $11,000,000 Stock Redemption Facility: $ 1,700,000 Exhibit A SECOND AMENDED AND RESTATED REVOLVING NOTE $20,000,000 New York, New York March ___, 1999 FOR VALUE RECEIVED, the undersigned, NEW LINDEN PRICE RITE, INC., a New Jersey corporation ("New Linden"), and SHOP RITE OF READING, INC., a Pennsylvania corporation ("Reading", and together with New Linden, each a "Maker" and collectively, the "Makers"), jointly and severally, hereby promise to pay to the order of HELLER FINANCIAL, INC. (the "Lender"), at the office of HELLER FINANCIAL, INC. (the "Agent"), 500 West Monroe Street, Chicago, Illinois 60661, on the Termination Date as defined in the Amended and Restated Revolving Credit and Term Loan Agreement dated as of May 2, 1997 among the Makers, Foodarama Supermarkets, Inc., a New Jersey corporation, the Guarantors named therein, the Lenders named therein and the Agent (as the same may be amended, restated, modified or supplemented from time to time in accordance with its terms, the "Credit Agreement") or earlier as provided for in the Credit Agreement, the lesser of the principal sum of TWENTY MILLION DOLLARS AND NO CENTS ($20,000,000) or the aggregate unpaid principal amount of all Revolving Loans from the Lender pursuant to the terms of the Credit Agreement, in lawful money of the United States of America in immediately available funds, and to pay interest from the date hereof on the principal amount hereof from time to time outstanding, in like funds, at said office, at a rate or rates per annum and payable on such dates as determined pursuant to the terms of the Credit Agreement. This Revolving Note amends and restates in its entirety and is given in substitution for (but not satisfaction of) that certain Amended and Restated Revolving Note in the original principal amount of $17,500,000. The obligations evidenced by this Revolving Note including obligations outstanding under the Credit Agreement immediately prior to the issuance of this Revolving Note (including, without limitation accrued and unpaid interest and fees under the Credit Agreement as of the date hereof), which continue to be outstanding, and the issuance of this Revolving Note does not evidence or cause a repayment or novation with respect to such obligations. This Revolving Note is subject to the terms of the Credit Agreement, which terms are hereby incorporated herein by reference. This Revolving Note is secured pursuant to and the holder is entitled to the benefits of the Credit Agreement. The Makers promise to pay interest, on demand, on any overdue principal and fees and, to the extent permitted by law, overdue interest from their due dates at a rate or rates determined as set forth in the Credit Agreement. The Makers hereby waive diligence, presentment, demand, protest and notice of any kind whatsoever. The non-exercise by the holder of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance. All borrowings evidenced by this Revolving Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof, or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such a notation shall not in any manner affect the obligations of the Makers to make payments of principal and interest in accordance with the terms of this Revolving Note and the Credit Agreement. This Revolving Credit Note is one of the Notes referred to in the Credit Agreement, which, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. NEW LINDEN PRICE RITE, INC. By:_________________________ Name: Title: SHOP RITE OF READING, INC. By:_________________________ Name: Title: Loans and Payment Unpaid Principal Name of Amount and Payments of Balance of Person Making Date Type of Loan Principal/Interest Note Notation EX-27 2 FDS --
5 1000 6-Mos Oct-30-1999 Nov-01-1998 May-01-1999 3,980 0 9,080 (510) 39,311 52,751 153,371 (70,852) 154,895 63,063 0 0 0 1,622 32,304 154,895 399,027 0 294,426 0 100,554 0 2,816 1,382 470 912 0 0 0 912 0.82 0.82
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