~~NEW JERSEY~~New Jersey

22-1576170

(State or other jurisdiction of incorporation or organization)

(I. R. S. Employer Identification No.)

733 ~~MOUNTAIN AVENUE, SPRINGFIELD, NEW JERSEY~~Mountain Avenue, Springfield, New Jersey, 07081

~~07081~~

(Address of principal executive offices) (Zip Code)

~~(Zip Code)~~

~~(973) 467-2200~~

(Registrant's telephone number, including area ~~code)~~code:

(973) 467-2200

Securities registered pursuant to Section 12(b) of the Act:

Class A common stock, no par value

VLGEA

The NASDAQ Stock Market

(Title of Class)

(Trading Symbol)

(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None



Large accelerated filer q☐						Accelerated filer x ☒
Non-accelerated filer q☐ (Do not check if a smaller reporting company)						Smaller reporting company q ☒
						Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the ~~Registrant~~registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ~~_____~~☐ No __X__☒.


PART I		PAGE NO.

FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets		3

Consolidated Statements of Operations		4

Consolidated Statements of Comprehensive Income		5

~~PART I~~		~~PAGE NO.~~

~~FINANCIAL INFORMATION~~

~~Item 1. Financial Statements (Unaudited)~~

~~Consolidated Balance Sheets~~	3

Consolidated Statements of ~~Operations~~Shareholders' Equity	46

~~Consolidated Statements of Comprehensive Income~~		5

Consolidated Statements of Cash Flows	67

Notes to Consolidated Financial Statements		78

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		1213

Item 3. Quantitative & Qualitative Disclosures about Market Risk		1821

Item 4. Controls and Procedures		1821

PART II

OTHER INFORMATION



Item ~~2. Unregistered Sales of Equity Securities and Use of Proceeds~~ 6. Exhibits		2022

~~Item 6. Exhibits~~Signatures		2023

~~Signatures~~	21

VILLAGE SUPER MARKET, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
January 27,
2018 July 29,
2017
ASSETS
Current assets
Cash and cash equivalents $ 89,738
$ 87,435
Merchandise inventories 42,346
41,852
Patronage dividend receivable 4,850
12,655
Notes receivable from Wakefern —
22,118
Income taxes receivable 2,673
1,742
Other current assets 18,424
15,670
Total current assets 158,031
181,472

Property, equipment and fixtures, net 205,401
204,440
Notes receivable from Wakefern 45,731
22,562
Investment in Wakefern 27,093
27,093
Goodwill 12,057
12,057
Other assets 19,574
7,601

Total assets $ 467,887
$ 455,225

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Capital and financing lease obligations $ 714
$ 652
Notes payable to Wakefern 254
292
Accounts payable to Wakefern 63,332
59,556
Accounts payable and accrued expenses 16,401
17,279
Accrued wages and benefits 16,620
17,810
Income taxes payable 822
604
Total current liabilities 98,143
96,193

Long-term debt
Capital and financing lease obligations 42,167
42,532
Notes payable to Wakefern 6
114
Notes payable related to New Markets Tax Credit 6,563
—
Total long-term debt 48,736
42,646

Pension liabilities 14,431
15,194
Other liabilities 12,393
14,372

Commitments and contingencies

Shareholders' equity

Preferred stock, no par value: Authorized 10,000 shares, none issued —
—
Class A common stock, no par value: Authorized 20,000 shares; issued 10,569 shares at January 27, 2018 and 10,562 shares at July 29, 2017 59,573
57,852
Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,304 shares at January 27, 2018 and July 29, 2017 699
699
Retained earnings 250,397
244,308
Accumulated other comprehensive loss (7,220 ) (7,406 )
Less treasury stock, Class A, at cost: 504 shares at January 27, 2018 and 477 shares at July 29, 2017 (9,265 ) (8,633 )
Total shareholders’ equity 294,184
286,820

Total liabilities and shareholders’ equity $ 467,887
$ 455,225


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
	October 24, 2020		July 25, 2020
ASSETS
Current assets
Cash and cash equivalents	$	99,602	$	111,681
Merchandise inventories	46,896		42,135
Patronage dividend receivable	15,813		11,204


Income taxes receivable	10,612		12,801
Other current assets	20,591		19,499
Total current assets	193,514		197,320

Property, equipment and fixtures, net	265,184		269,741
Operating lease assets	302,851		309,756
Notes receivable from Wakefern	53,575		53,008
Investment in Wakefern	30,132		29,462
Goodwill	24,190		24,190
Other assets	32,422		32,069

Total assets	$	901,868	$	915,546
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities
Operating lease obligations	$	16,664	$	19,121
Finance lease obligations	485		466
Notes payable to Wakefern	1,005		303
Current portion of debt	6,976		6,421
Accounts payable to Wakefern	76,918		83,045
Accounts payable and accrued expenses	29,422		29,793
Accrued wages and benefits	23,340		23,649
Income taxes payable	121		0
Total current liabilities	154,931		162,798
Long-term debt
Operating lease obligations	294,434		298,027
Finance lease obligations	22,892		23,078
Notes payable to Wakefern	761		882
Long-term debt	72,186		74,194
Total long-term debt	390,273		396,181
Pension liabilities	6,159		6,166
Other liabilities	16,764		18,081
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value: Authorized 10,000 shares, NaN issued	0		0
Class A common stock, no par value: Authorized 20,000 shares; issued 10,988 shares at October 24, 2020 and 10,985 shares at July 25, 2020	68,695		68,072
Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,294 shares at October 24, 2020 and July 25, 2020	697		697
Retained earnings	286,344		286,241
Accumulated other comprehensive loss	(8,056)		(8,751)
Less treasury stock, Class A, at cost: 726 shares at October 24, 2020 and July 25, 2020	(13,939)		(13,939)
Total shareholders’ equity	333,741		332,320

Total liabilities and shareholders’ equity	$	901,868	$	915,546

VILLAGE SUPER MARKET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)
13 Weeks Ended 26 Weeks Ended
January 27,
2018 January 28,
2017 January 27,
2018 January 28,
2017
Sales $ 417,382
$ 412,215
$ 803,856
$ 801,907

Cost of sales 305,097
300,977
587,691
586,021

Gross profit 112,285
111,238
216,165
215,886

Operating and administrative expense 96,066
94,393
188,358
185,524

Depreciation and amortization 6,386
6,233
12,621
12,296

Operating income 9,833
10,612
15,186
18,066

Interest expense (1,102 ) (1,114 ) (2,207 ) (2,230 )

Interest income 864
648
1,764
1,335

Income before income taxes 9,595
10,146
14,743
17,171

Income taxes 84
4,154
2,215
7,070

Net income $ 9,511
$ 5,992
$ 12,528
$ 10,101

Net income per share:

Class A common stock:

Basic $ 0.74
$ 0.47
$ 0.97
$ 0.80
Diluted $ 0.66
$ 0.42
$ 0.87
$ 0.71

Class B common stock:

Basic $ 0.48
$ 0.31
$ 0.63
$ 0.52
Diluted $ 0.48
$ 0.31
$ 0.63
$ 0.52


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
	13 Weeks Ended
		October 24, 2020		October 26, 2019
Sales		$	490,136	$	407,402

Cost of sales		352,173		293,856

Gross profit		137,963		113,546

Operating and administrative expense		124,363		103,140

Depreciation and amortization		8,714		7,438

Operating income		4,886		2,968



Interest expense		(987)		(567)

Interest income		891		1,259

Income before income taxes		4,790		3,660

Income taxes		1,430		1,093

Net income		$	3,360	$	2,567

Net income per share:
Class A common stock:
Basic		$	0.26	$	0.20
Diluted		$	0.23	$	0.18

Class B common stock:
Basic		$	0.17	$	0.13
Diluted		$	0.17	$	0.13

VILLAGE SUPER MARKET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands) (Unaudited)
13 Weeks Ended 26 Weeks Ended
January 27,
2018 January 28,
2017 January 27,
2018 January 28,
2017
Net income $ 9,511
$ 5,992
$ 12,528
$ 10,101

Other comprehensive income:

Amortization of pension actuarial loss, net of tax (1) 102
224
186
491
Pension remeasurement, net of tax (2) —
372
—
372

Comprehensive income $ 9,613
$ 6,588
$ 12,714
$ 10,964


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)
	13 Weeks Ended
		October 24, 2020		October 26, 2019
Net income		$	3,360	$	2,567

Other comprehensive income:
Unrealized gains on interest rate swaps, net of tax (1)		594		0
Amortization of pension actuarial loss, net of tax (2)		101		101




Comprehensive income		$	4,055	$	2,668

VILLAGE SUPER MARKET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
26 Weeks Ended
January 27,
2018 January 28,
2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 12,528
$ 10,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 12,621
12,296
Non-cash share-based compensation 1,721
1,484
Deferred taxes (2,221 ) (90 )

Changes in assets and liabilities:
Merchandise inventories (494 ) (1,420 )
Patronage dividend receivable 7,805
7,907
Accounts payable to Wakefern 3,776
1,001
Accounts payable and accrued expenses (1,692 ) (1,712 )
Accrued wages and benefits (1,190 ) (664 )
Income taxes receivable / payable (713 ) (11,502 )
Other assets and liabilities (3,717 ) (2,255 )
Net cash provided by operating activities 28,424
15,146

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures (12,731 ) (13,013 )
Proceeds from the sale of assets 16
—
Investment in notes receivable from Wakefern (23,223 ) (927 )
Maturity of notes receivable from Wakefern 22,172
—
Investment in notes receivable related to New Markets Tax Credit financing
(4,835 ) —
Net cash used in investing activities (18,601 ) (13,940 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from exercise of stock options —
812
Excess tax benefit related to share-based compensation —
83
Proceeds from New Markets Tax Credit financing 6,860
—
Debt Issuance Costs (297 ) —
Principal payments of long-term debt (449 ) (1,043 )
Dividends (6,439 ) (6,330 )
Treasury stock purchases (632 ) —
Net cash used in financing activities (957 ) (6,478 )

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 8,866
(5,272 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD 87,435
88,379

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 96,301
$ 83,107

SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS MADE FOR:

Interest $ 2,207
$ 2,230
Income taxes $ 5,140
$ 18,559


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands) (Unaudited)
	13 Weeks Ended October 24, 2020 and October 26, 2019
	Class A Common Stock			Class B Common Stock					Accumulated Other Comprehensive Income (Loss)		Treasury Stock Class A			Total Shareholders' Equity
	Shares Issued	Amount		Shares Issued	Amount		Retained Earnings				Shares	Amount
Balance, July 25, 2020	10,985	$	68,072	4,294	$	697	$	286,241	$	(8,751)	726	$	(13,939)	$	332,320
Net income	—	—		—	—		3,360		—		—	—		3,360
Other comprehensive income, net of tax of $307	—	—		—	—		—		695		—	—		695
Dividends	—	—		—	—		(3,257)		—		—	—		(3,257)


Restricted shares forfeited	(5)	(12)		—	—		—		—		—	—		(12)
Share-based compensation expense	8	635		—	—		—		—		—	—		635


Balance, October 24, 2020	10,988	$	68,695	4,294	$	697	$	286,344	$	(8,056)	726	$	(13,939)	$	333,741

Balance, July 27, 2019	10,593	$	65,114	4,294	$	697	$	270,753	$	(8,342)	502	$	(9,550)	$	318,672
Net income	—	—		—	—		2,567		—		—	—		2,567
Other comprehensive income, net of tax of $44	—	—		—	—		—		101		—	—		101
Dividends	—	—		—	—		(3,220)		—		—	—		(3,220)

Treasury stock purchases	—	—		—	—		—		—		1	(20)		(20)
Restricted shares forfeited	(2)	(30)		—	—		—		—		—	—		(30)
Share-based compensation expense	2	863		—	—		—		—		—	—		863
Adjustment due to the adoption of ASU 2016-02, net of tax of $1,385	—	—		—	—		3,514		—		—	—		3,514
Balance, October 26, 2019	10,593	$	65,947	4,294	$	697	$	273,614	$	(8,241)	503	$	(9,570)	$	322,447


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	13 Weeks Ended
	October 24, 2020		October 26, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,360	$	2,567
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,072		7,438
Non-cash share-based compensation	623		833

Deferred taxes	(836)		1,270


Gain on sale of property, equipment and fixtures	(42)		0

Changes in assets and liabilities:
Merchandise inventories	(4,761)		(2,180)
Patronage dividend receivable	(4,609)		(4,367)
Accounts payable to Wakefern	(6,127)		1,294
Accounts payable and accrued expenses	(1,608)		(1,381)
Accrued wages and benefits	(309)		(1,158)
Income taxes receivable / payable	2,260		1,138
Other assets and liabilities	(376)		(2,079)
Net cash (used in) provided by operating activities	(3,353)		3,375

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(3,301)		(22,349)
Proceeds from the sale of assets	65		0
Investment in notes receivable from Wakefern	(567)		(796)




Net cash used in investing activities	(3,803)		(23,145)

CASH FLOWS FROM FINANCING ACTIVITIES


Proceeds from issuance of long-term debt	50,000		0
Principal payments of long-term debt	(1,444)		(170)

Payments on revolving line of credit	(50,000)		0
Debt issuance costs	(222)		0
Dividends	(3,257)		(3,220)
Treasury stock purchases	0		(20)
Net cash used in financing activities	(4,923)		(3,410)

NET DECREASE IN CASH AND CASH EQUIVALENTS	(12,079)		(23,180)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	111,681		101,121

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	99,602	$	77,941

SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS MADE FOR:
Interest	$	987	$	567
Income taxes	$	0	$	68

NONCASH SUPPLEMENTAL DISCLOSURES:
Investment in Wakefern and increase in notes payable to Wakefern	$	670	$	93
Capital expenditures included in accounts payable and accrued expenses	$	4,951	$	2,585

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of ~~January 27, 2018~~October 24, 2020 and the consolidated statements of operations, comprehensive income and cash flows for the 13 weeks ended October 24, 2020 and October 26, ~~week periods ended January 27, 2018 and January 28, 2017~~2019 of Village Super Market, Inc. (“Village” or the “Company”).

The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July ~~29, 2017~~25, 2020 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with these financial statements. The results of operations for the ~~periods~~period ended ~~January 27, 2018~~October 24, 2020 are not necessarily indicative of the results to be expected for the full year.

The Company utilizes the two-class method of computing and presenting net income per share. The two-class method is an earnings allocation formula that calculates basic and diluted net income per share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings. Under the two-class method, Class A common stock is assumed to receive a 54% greater participation in undistributed earnings than Class B common stock, in accordance with the classes' respective dividend rights. Unvested share-based payment awards that contain nonforfeitable rights to dividends are treated as participating securities and therefore included in computing net income per share using the two-class method.

Diluted net income per share for Class A common stock is calculated utilizing the if-converted method, which assumes the conversion of all shares of Class B common stock to Class A common stock on a share-for-share basis, as this method is more dilutive than the two-class method. Diluted net income per share for Class B common stock does not assume conversion of Class B common stock to shares of Class A common stock.


	13 Weeks Ended
	October 24, 2020
		Class A		Class B
Numerator:
Net income allocated, basic		$	2,526	$	716
Conversion of Class B to Class A shares		716		0

Net income allocated, diluted		$	3,242	$	716

Denominator:
Weighted average shares outstanding, basic		9,850		4,294
Conversion of Class B to Class A shares		4,294		0

Weighted average shares outstanding, diluted		14,144		4,294

	13 Weeks Ended
	October 26, 2019
		Class A		Class B
Numerator:
Net income allocated, basic		$	1,939	$	558
Conversion of Class B to Class A shares		558		0
Effect of share-based compensation on allocated net income		(2)		(1)
Net income allocated, diluted		$	2,495	$	557

Denominator:
Weighted average shares outstanding, basic		9,770		4,294
Conversion of Class B to Class A shares		4,294		0

Weighted average shares outstanding, diluted		14,064		4,294

13 Weeks Ended 26 Weeks Ended
January 27, 2018 January 27, 2018
Class A Class B Class A Class B
Numerator:
Net income allocated, basic $ 7,174
$ 2,065
$ 9,452
$ 2,721
Conversion of Class B to Class A shares 2,065
—
2,721
—
Effect of share-based compensation on allocated net income —
—
—
—
Net income allocated, diluted $ 9,239
$ 2,065
$ 12,173
$ 2,721

Denominator:

Weighted average shares outstanding, basic 9,714
4,304
9,718
4,304
Conversion of Class B to Class A shares 4,304
—
4,304
—
Dilutive effect of share-based compensation —
—
—
—
Weighted average shares outstanding, diluted 14,018
4,304
14,022
4,304

13 Weeks Ended 26 Weeks Ended
January 28, 2017 January 28, 2017
Class A Class B Class A Class B
Numerator:

Net income allocated, basic $ 4,548
$ 1,327
$ 7,664
$ 2,239
Conversion of Class B to Class A shares 1,327
—
2,239
—
Effect of share-based compensation on allocated net income 6
(3 ) 8
(3 )
Net income allocated, diluted $ 5,881
$ 1,324
$ 9,911
$ 2,236

Denominator:

Weighted average shares outstanding, basic 9,613
4,319
9,603
4,319
Conversion of Class B to Class A shares 4,319
—
4,319
—
Dilutive effect of share-based compensation 52
—
50
—
Weighted average shares outstanding, diluted 13,984
4,319
13,972
4,319

Outstanding stock options to purchase Class A shares of ~~384~~154 and 52241 were excluded from the calculation of diluted net income per share at ~~January 27, 2018~~October 24, 2020 and ~~January 28, 2017,~~October 26, 2019, respectively, as a result of their anti-dilutive effect. In addition, ~~369~~416 and ~~246~~323 non-vested restricted Class A shares, which are considered participating securities, and their allocated net income were excluded from the diluted net income per share calculation at ~~January 27, 2018~~October 24, 2020 and ~~January 28, 2017,~~October 26, 2019, respectively, due to their anti-dilutive effect.


	13 Weeks Ended
		October 24, 2020		October 26, 2019
Service cost		$	54	$	51
Interest cost on projected benefit obligations		422		565
Expected return on plan assets		(483)		(703)

Amortization of net losses		147		145
Net periodic pension cost		$	140	$	58

On November 29, 2016, the Company amended the Village Super Market Local 72 Retail Clerks Employees’ Retirement Plan, which covers union employees in the Stroudsburg store, to freeze all benefits effective January 31, 2017. As a result of this amendment, the Company recognized a pre-tax remeasurement gain totaling $629 in accumulated other comprehensive loss during fiscal 2017. The remeasurement had no impact on the consolidated statements of operations.

The Company ~~invested $22,000~~is involved in other litigation incidental to the normal course of business. Company management is of the ~~proceeds received in variable rate notes receivable from Wakefern~~opinion that ~~earn interest at~~ the ~~prime rate plus 1.25% and mature~~ultimate resolution of these legal proceedings should not have a material adverse effect on ~~August 15, 2022. Wakefern has~~ the ~~right to prepay these notes at any time. Under certain conditions,~~consolidated financial position, results of operations or liquidity of the Company can require Wakefern to prepay the notes, although interest earned since inception would be reduced as if it was earned based on overnight money market rates as paid by Wakefern on demand deposits.Company.

On May 6, 2020, Village entered into a credit agreement (the “Credit Facility”) with Wells Fargo National Bank, National Association (“Wells Fargo”) that ~~amends, restates and~~ supersedes in its entirety the prior credit agreement with Wells Fargo dated November 9, 2017. The principal purpose of the Credit Facility is to finance general corporate and working capital requirements and Village’s acquisition of certain Fairway assets. Among other things, the Credit Facility provides for a maximum loan ~~agreement dated September 16, 1999 and all amendments to that agreement. The agreement maintains Village's~~amount of $150,500 as further set forth below:

•An unsecured term loan with a maximum loan amount of $25,500. On May 12, 2020, Village executed a $25,500 term note, repayable in equal monthly installments based on a seven-year amortization schedule through May 4, 2027 and bearing interest at the applicable LIBOR rate plus 1.35%. Additionally, Village executed an interest rate swap for a notional amount equal to the term loan amount that fixes the base LIBOR rate at .41% per annum through May 4, 2027, resulting in a fixed effective interest rate of 1.76% on the term note.

•The ability to convert up to $50,000 of the revolving line of credit ~~agreement continues~~ to ~~provide~~a secured converted term loan, which shall reduce the maximum amount available for borrowing under the revolving line of credit. On September 1, 2020, Village converted $50,000 of its revolving line of credit to a secured converted term loan. The conversion reduced the maximum amount available for borrowing under the revolving line of credit from $125,000 to $75,000. The term loan bears interest at the applicable LIBOR rate plus 1.50% and is repayable in equal monthly installments based on a fifteen-year amortization schedule beginning on the conversion date. Additionally, Village previously executed a forward interest rate swap, effective on the conversion date, for a notional amount equal to the term loan amount that fixes the base LIBOR rate at .69% per annum for 15 years, resulting in a fixed effective interest rate of 2.19% on the converted term loan. The term loan is secured by real properties of Village Super Market, Inc. and its subsidiaries, including the sites of 3 Village stores.

The Credit Facility also provides for up to ~~$3,000~~$25,000 of letters of credit ($7,336 outstanding at October 24, 2020), which secure obligations for store leases and construction performance guarantees to municipalities. The ~~credit agreement continues to contain~~Credit Facility contains covenants that, among other conditions, require a ~~maximum liabilities to~~minimum tangible net worth, ~~ratio,~~ a minimum fixed charge coverage ratio and a ~~positive net income. There were no amounts outstanding~~maximum adjusted debt to EBITDAR ratio. The Company was in compliance with all covenants of the credit agreement at ~~January 27, 2018 or July 29, 2017 under the superseded facility.~~October 24, 2020.

On December 22, 2017 the Tax Cuts and Jobs Act (the “Tax Act”) was enacted by the U.S. Government. The Tax Act made significant changes to the U.S. tax code that will affect the Company's fiscal year ending July 28, 2018, including, but not limited to, reducing the U.S. federal corporate tax rate from 35.0%% to 21.0%% effective January 1, 2018, and introducing bonus depreciation that will allow for full expensing of qualified property.

As the Company’s fiscal year ends on July 28, 2018, the Company’s U.S. federal corporate statutory income tax rate will be subject to a full year blended tax rate of 26.9%% for fiscal 2018, and 21.0%% for subsequent fiscal years. As a result of the decrease in the U.S. federal corporate statutory rate, deferred tax balances were remeasured based on the rates at which they are expected to reverse in the future. In the 26 weeks ended January 27, 2018, a benefit of $2,726 was recognized related to the remeasurement of the Company’s deferred tax balances, which is included in Income taxes on the consolidated statements of operations.

On December 22, 2017, the Securities Exchange Commission ("SEC") issued guidance under Staff Accounting Bulletin No. 118, "Income Tax Accounting Implications of the Tax Cuts and Jobs Act," allowing taxpayers to record provisional amounts for reasonable estimates when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete their accounting for certain income tax effects of the Tax Act. The SEC has issued rules that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the related tax impacts. The Company has completed recording the impacts of the change in tax rate. Estimates on the other impacts of the Tax Act were based on information currently available. The final impacts of the Tax Act may differ from the Company’s estimates due to changes in interpretations of the Tax Act or further legislation related to the Tax Act. Any changes could affect the measurement of deferred tax balances or potentially give rise to new deferred tax amounts.

On December 29, 2017, the Company entered into a financing transaction with Wells Fargo Community Investment Holdings, LLC (“Wells Fargo”) under a qualified New Markets Tax Credit (“NMTC”) program related to the construction of a new store in the Bronx, New York. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) and is intended to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their Federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments.

In connection with the financing, the Company loaned $4,835 to VSM Investment Fund, LLC (the "Investment Fund") at an interest rate of 1.403% per year and with a maturity date of December 31, 2044. Repayments on the loan commence in March 2025. Wells Fargo contributed $2,375 to the Investment Fund and, by virtue of such contribution, is entitled to substantially all of the tax benefits derived from the NMTC. The Investment Fund is a wholly owned subsidiary of Wells Fargo. The loan to the Investment Fund is recorded in ~~Other~~other assets in the consolidated balance sheets.

The Investment Fund then contributed the proceeds to a CDE, which, in turn, loaned combined funds of $6,563, net of debt issuance costs, to Village Super Market of NY, LLC, a wholly-owned subsidiary of the Company, at an interest rate of 1.000% per year with a maturity date of December 31, 2051. These loans are secured by the leasehold improvements and equipment related to the construction of the Bronx store. Repayment of the loans commences in March 2025. The proceeds of the loans from the CDE ~~will be~~were used to partially fund the construction of the Bronx store. The Notes payable related to New Markets Tax Credit, net of debt issuance costs, are recorded in ~~Long-term~~long-term debt in the consolidated balance sheets.

could result in Wells Fargo's projected tax benefits not being realized and, therefore, require the Company to indemnify Wells Fargo for any loss or recapture of NMTCs. The Company does not anticipate any credit recapture will be required in connection with this financing arrangement. The transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase Wells Fargo's interest in the Investment Fund. The value attributed to the put/call is de minimis. We believe that Wells Fargo will exercise the put option in December 2024, at the end of the recapture period, that will result in a net benefit to the Company of $1,728. The Company is recognizing the net benefit over the seven-year compliance ~~period.~~

~~In November 2016, the FASB issued ASU No. 2016-18, "Restricted Cash," which requires that the statement of cash flows explain the change during the~~ period in ~~the total of cash, cash equivalents,~~operating and restricted cash. Accordingly, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on the statement of cash flows. The Company early-adopted ASU No. 2016-18 during the second quarter of fiscal 2018 and applied its provisions retrospectively. Other than the change in presentation within the consolidated statement of cash flows, the adoption of ASU No. 2016-18 did not have an impact on the Company's consolidated financial statements. Included in Other assets at January 27, 2018 is $6,563 of cash and cash equivalents related to the NMTC financing transaction that are restricted as to withdrawal and designated for expenditure in the construction of noncurrent assets in the Bronx store. There were no restricted cash or cash equivalents at July 29, 2017.administrative expense.

In 2020, the Company executed 2 interest rate swaps with an aggregate notional value of $75,500 to hedge the variable cash flows associated with variable-rate loans under the Company's Credit Facility. The interest rate swaps were executed for risk management and are not held for trading purposes. The objective of the interest rate swaps is to hedge the variability of cash flows resulting from fluctuations in LIBOR. The swaps replaced the applicable LIBOR with fixed interest rates and payments are settled monthly when payments are made on the variable-rate loans. The Company's derivatives qualify and have been designated as cash flow hedges of interest rate risk. The gain or loss on the derivative is recorded in Accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in Accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the variable-rate loans. The Company reclassified $66 from Accumulated other comprehensive loss to Interest expense during the 13 weeks ended October 24, 2020.

On May 14, 2020, Village completed its acquisition of certain assets, including 5 supermarkets averaging 52,000 sq. ft. (30,000 selling sq. ft.), a production distribution center (the “PDC”) and the intellectual property of Fairway Group Holdings Corp. and certain of its subsidiaries (“Fairway”), including the names “Fairway” and “Fairway Markets.” Four of the supermarkets are in Manhattan, specifically the Upper West Side, Upper East Side, Kips Bay and Chelsea locations, and a fifth store is located in Pelham, NY. The acquisition was effectuated pursuant to the ~~normal course~~Asset Purchase Agreement (the "APA"), entered into on January 20, 2020, revised on March 25, 2020 and approved by the United States Bankruptcy Court for the Southern District of ~~business. Company management is~~New York through a Sale Order entered on April 20, 2020. Village paid $73,622 for the Fairway assets, net of cash acquired, and assumed certain liabilities, consisting primarily of those arising from acquired leases. Additionally, at the time of closing Village received a $2,035 credit arising from the breakup of Village’s initial “stalking horse” bid under the January 20, 2020 Asset Purchase Agreement. The credit was recognized as a reduction in operating and administrative expense in the fourth quarter of fiscal 2020. The Fairway acquisition expands our presence in New York City under an iconic city brand and provides Village the ability to expand centralized food production to support stores under all of our banners.

Village accounted for this transaction as a business combination in accordance with the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the ~~opinion that~~acquisition date. In connection with this acquisition, the ~~ultimate resolution~~Company recorded $11,540 of ~~these legal proceedings should not have~~goodwill attributable to the assembled workforce and cost synergies. The goodwill related to this acquisition is deductible for tax purposes. Additionally, the Company recorded a ~~material adverse effect~~$14,200 indefinite-lived intangible asset related to the trade name. The fair value of the intangible asset was determined based on the ~~consolidated financial position, results of operations or liquidity~~discounted cash flow model using the relief from royalty method. The fair value of the ~~Company.~~property, equipment and fixtures were determined based on the indirect cost approach in which current costs that were not new were adjusted for all forms of depreciation. The Company also evaluated the fair value of the leases assumed in the acquisition, which evaluated comparable rents in the areas of the locations. Leases were determined to be at market apart from one location. For this location, the Company recorded a favorable lease of $4,360 within operating lease assets. The favorable lease is being amortized over the remaining duration of the lease. Transaction costs were expensed as incurred. The allocation

Village Super Market, Inc. (the “Company” or “Village”) operates a chain of 29thirty ShopRite supermarkets, five Fairway Markets and three Gourmet Garage specialty markets located in New Jersey, ~~Maryland~~New York, Pennsylvania and ~~northeastern Pennsylvania.~~Maryland. Village is the second largest member of Wakefern Food Corporation (“Wakefern”), the nation’s largest retailer-owned food cooperative and owner of the ShopRite, ~~name.~~Fairway and Gourmet Garage names. As further described in the Company’s Form 10-K, this ownership interest in Wakefern provides Village with many of the economies of scale in purchasing, distribution, ~~private label products,~~ advanced retail technology, marketing and advertising associated with chains of greater size and geographic coverage.

On May 14, 2020, Village completed its acquisition of certain assets, including five supermarkets averaging 52,000 sq. ft. (30,000 selling sq. ft.), a production distribution center (the “PDC”) and the intellectual property of Fairway Group Holdings Corp. and certain of its subsidiaries (“Fairway”), including the names “Fairway” and “Fairway Markets” for $73,622, net of cash acquired. Four of the supermarkets are in Manhattan, specifically the Upper West Side, Upper East Side, Kips Bay and Chelsea locations, and a fifth store is located in Pelham, NY. Like Village, Fairway traces its roots back to a neighborhood market over 80 years ago. Fairway Markets offer a one-stop destination shopping experience with an emphasis on fresh, unique, and high quality offerings paired with an expansive variety of natural, organic, specialty and gourmet products. The PDC is a centralized commissary that promotes production efficiency, product quality and consistency in the bakery, prepared foods, meals to go and other perishable product categories. Production costs at the PDC, including materials, labor and overhead, are included in Cost of sales. The Fairway acquisition expands our presence in New York City under an iconic city brand and provides Village the ability to expand centralized food production to support stores under all of our banners.

The supermarket industry is highly competitive and characterized by narrow profit margins. The Company competes directly with multiple retail formats, both in-store and online, including national, regional and local supermarket chains as well as warehouse clubs, supercenters, drug stores, discount general merchandise stores, fast food chains, restaurants, dollar stores and convenience stores. Village competes by using low pricing, providing a superior customer service experience and a broad range of consistently available quality products, ~~(including~~including our own brands portfolio. In October 2019, ShopRite ~~private labeled products).~~introduced the Right Price Promise pricing strategy, a commitment to everyday low prices on the items customers purchase most frequently. The ShopRite Price Plus preferred customer program enables Village to offer continuity programs, focus on target marketing initiatives and to offer discounts and attach digital coupons directly to a customer's Price Plus card.

In November 2019, ShopRite launched the Bowl & Basket and Paperbird own brands. Bowl & Basket foods pair thoughtfully selected ingredients at a budget friendly price and Paperbird offers a line of newly designed household products. ShopRite expects to add nearly 3,500 Bowl & Basket foods and Paperbird household products from their launch in November 2019 through fiscal 2021. The introduction of Bowl & Basket and Paperbird follows the 2016 launch of ShopRite’s Wholesome Pantry brands, which include the Wholesome Pantry Organic line as well as a range of products free from 110 ingredients and artificial additives and preservatives.

The Company’s stores, six of which are owned, average ~~59,000~~55,000 total square feet. These larger store sizes enable the Company’s stores to provide a “one-stop” shopping experience and to feature expanded higher margin specialty departments such as an ~~on-site~~onsite bakery, an expanded delicatessen, a variety of natural and organic foods, ethnic and international foods, prepared foods and pharmacies.

Many of our stores emphasize a Power Alley, which features high margin, fresh, convenience offerings in an area within the store that provides quick customer entry and exit for those customers shopping for today's lunch or dinner. Certain of our stores include the Village Food Garden concept featuring a restaurant style kitchen, and several kiosks offering a wide variety of store prepared specialty foods for both take-home and in-store dining.

Village also has on-site registered dieticians in seventeen stores that provide customers with free, private consultations on healthy meals and proper nutrition, as well as leading health related events both in store and in the community as part of the Well Everyday program. We have thirteen stores that offer ShopRite from Home covering most of the communities served by our stores. Online grocery ordering for in-store pick up or home delivery through ShopRite from Home is ~~an online ordering system that provides for in-store pickup or home delivery.~~available in twenty-six stores. Customers can browse our circular, create and edit shopping lists and use ShopRite from Home through shoprite.com or ~~on their smart phones or tablets through~~ the ShopRite app. Additionally, the ShopRite Order Express app enables customers to pre-order deli, catering, specialty

The Company was significantly impacted by the COVID-19 outbreak as it operates in and around one of the early U.S. epicenters of the health crisis with much of our trade area under stay-at-home orders from mid-March 2020 through June 2020. The Company is classified as an essential business and has remained open to serve our customers and the communities in which we operate. We continue to experience significant sales volatility, changes in customer shopping habits, shifts in product mix and increased demand through digital channels as a result of the COVID-19 pandemic. Demand remains high in most stores, however sales at Fairway and Gourmet Garage locations in Manhattan have been negatively impacted by localized residential population migration out of the city and less commuter and tourist traffic. Although the Company estimates that the current trends in sales and profits will continue for the second quarter of fiscal 2021, we expect continued uncertainty in our business as well as the local and regional economies in which we operate depending on the duration and intensity of the COVID-19 pandemic (see the "Outlook" section below for further discussion of risks and uncertainties).

Safety. Our first priority has and will continue to be the safety of our associates and our customers. We implemented enhanced sanitation programs, including hourly cleaning of high touch point areas throughout our stores, nightly deep cleaning and biweekly disinfectant fogging in every store, reduced store hours to allow appropriate time for cleaning, limited the number of customers allowed in each store at a time, reduced service department offerings including the sale of bulk self-service merchandise and closure of in-store restaurants and dining areas, a personal protective equipment program, required temperature checks for associates and installation of Plexiglas shields, floor markers and additional signage in high traffic areas to signify six-foot distances to encourage proper social distancing.

Associate Support. We paid temporary wage premiums up to $2 per hour above the standard wage rate for hourly front-line associates and weekly premiums for salaried front-line associates from late March through mid-August, provided Emergency Paid Leave to associates affected by COVID-19, supplied meals or meal coupons to our associates on duty through our Feeding Our Village Heroes Program, expanded remote work capabilities, limited travel of regional supervision teams, created a centralized call center and real-time alert text communication platform.

Responding to the needs of our Customers and Communities. Expanded digital capabilities, including expansion of stores offering ShopRite from Home, expanded the ShopRite Order Express app to provide pre-ordering capabilities in the deli and other areas, contactless pickup, prescription drug pickup and delivery, launched partnerships with online grocery picking and delivery services to better support our customers increased demand for these services and expanded mobile scan to an additional 10 stores.


	13 Weeks Ended
	October 24, 2020		October 26, 2019
Sales	100.00	%	100.00	%
Cost of sales	71.85		72.13
Gross profit	28.15		27.87
Operating and administrative expense	25.37		25.32
Depreciation and amortization	1.78		1.82
Operating income	1.00		0.73

Interest expense	(0.20)		(0.14)
Interest income	0.18		0.31
Income before taxes	0.98		0.90
Income taxes	0.29		0.27
Net income	0.69	%	0.63	%

13 Weeks Ended 26 Weeks Ended
January 27, 2018 January 28, 2017 January 27, 2018 January 28, 2017
Sales 100.00 % 100.00 % 100.00 % 100.00 %
Cost of sales 73.10
73.01
73.11
73.08
Gross profit 26.90
26.99
26.89
26.92
Operating and administrative expense 23.02
22.90
23.43
23.14
Depreciation and amortization 1.53
1.52
1.57
1.53
Operating income 2.35
2.57
1.89
2.25
Interest expense (0.26 ) (0.27 ) (0.27 ) (0.28 )
Interest income 0.21
0.16
0.22
0.17
Income before taxes 2.30
2.46
1.84
2.14
Income taxes 0.02
1.01
0.28
0.88
Net income 2.28 % 1.45 % 1.56 % 1.26 %

Sales. Sales were ~~$417,382~~$490,136 in the ~~second quarter of fiscal 2018,~~13 weeks ended October 24, 2020, an increase of ~~1.3%~~20.3% compared to the ~~second quarter~~13 weeks ended October 26, 2019. Sales increased due to the Fairway acquisition on May 14, 2020, the opening of the ~~prior year.~~Stroudsburg replacement store on November 1, 2019 and a same store sales increase of 6.6%. Same store sales increased due primarily to increased customer demand across most stores due to the impact of the COVID-19 pandemic. We continue to experience higher average basket sizes and decreased transaction counts as customers consolidate shopping trips. Digital sales growth accelerated through both ShopRite from Home and partnerships with online grocery picking and delivery services, increasing 172% in ~~recently remodeled~~the 13 weeks ended October 24, 2020 compared to the 13 weeks ended October 26, 2019. Demand remains high in most stores, however sales at Fairway and ~~expanded stores~~Gourmet Garage locations in ~~Chester~~Manhattan have been significantly negatively impacted due primarily to residential population migration out of the city and ~~Stirling, inflation~~less commuter and increased promotional spending. These increases were partially offset by two competitor store openings. The Company expects same store sales in fiscal 2018 to range from a 0.5% decrease to a 0.5% increase. tourist traffic during the COVID-19 pandemic.

Gross Profit. Gross profit as a percentage of sales ~~decreased .09%~~increased .28% in the ~~second quarter of fiscal 2018~~13 weeks ended October 24, 2020 compared to the ~~second quarter~~13 weeks ended October 26, 2019 due primarily to higher margins associated with Fairway despite higher costs as we transition and integrate the commissary operations into our business. Excluding the impact of ~~the prior year primarily due to decreased patronage dividends from Wakefern (.07%), increased promotional spending (.05%) and decreased departmental~~Fairway, gross ~~margin percentages (.11%) partially offset by a favorable change in product mix (.12%).~~

~~Gross~~ profit as a percentage of sales decreased ~~.03% in the six-month period of fiscal 2018 compared~~.39% due primarily to ~~the six-month period of the prior year primarily due to~~decreased departmental gross margin percentages (.70%), decreased patronage dividends and rebates received from Wakefern ~~(.04%~~(.10%) and ~~increased promotional spending (.09%~~an unfavorable change in product mix (.10%) partially offset by ~~a favorable change~~lower promotional spending (.35%) and increased leverage on warehouse assessment charges from Wakefern (.16%).

Departmental gross profits, excluding the impact of Fairway, decreased in the 13 weeks ended October 24, 2020 compared to the 13 weeks ended October 26, 2019 due primarily to price investments resulting from ShopRite's Right Price Promise pricing strategy introduced in October 2019. Both product mix ~~(.12%).~~and departmental gross margin percentages were also impacted by limitations in service departments and product availability as a result of the COVID-19 pandemic.

Operating and Administrative ~~Expense~~.Expense. Operating and administrative expense as a percentage of sales increased ~~.12%~~.05% in the ~~second quarter of fiscal 2018~~13 weeks ended October 24, 2020 compared to the ~~second quarter~~13 weeks ended October 26, 2019. The 13 weeks ended October 26, 2019 included pre-opening costs of the ~~prior year due primarily~~Stroudsburg, Pennsylvania replacement store (.21%) and store closure costs and charges to ~~payroll investments in service departments, training~~write off the lease asset and ~~other initiatives (.21%~~related obligations for the old Stroudsburg store (.07%).

~~Operating~~ Excluding these items, operating and administrative expense as a percentage of sales increased ~~.29%~~.33% in the ~~six-monthperiod of fiscal 2018~~13 weeks ended October 24, 2020 compared to the ~~six-monthperiod of the prior year primarily~~13 weeks ended October 26, 2019 due primarily to incremental costs related to COVID-19, including enhanced wages and benefits and expanded safety and sanitation protocols (.24%), increased occupancy costs due primarily to the acquisitions of Fairway (.79%), increased costs associated with digital sales (.40%) partially offset by decreased payroll ~~investments~~(.75%) and workers' compensation and other fringe benefits (.25%). Payroll decreased primarily due to leverage from higher sales and reductions in service ~~departments, training~~department offerings partially offset by the addition of Fairway and ~~other initiatives (.32%).~~growth of ShopRite from Home.

Interest Income. Interest income ~~increased~~decreased in the ~~second quarter and six-month period of fiscal 2018~~13 weeks ended October 24, 2020 compared to the ~~corresponding period of the prior year~~13 weeks ended October 26, 2019 due primarily to ~~higher~~lower interest rates for amounts invested ~~and higher interest rates earned on~~in variable rate notes receivable from Wakefern and demand deposits invested at Wakefern.

The effective tax rate was impacted by the Tax Cuts and Jobs Act (the "Tax Act") enacted on December 22, 2017. The Tax Act makes significant changes to the U.S tax code that will affect our fiscal year ended July 28, 2018, including, but not limited to, reducing the U.S. federal statutory tax rate from 35% to 21% effective January 1, 2018 and bonus depreciation that will allow for full expensing of qualified property.

For the fiscal year ended July 28, 2018 the Company will have a blended federal corporate tax rate of 26.9% based on the effective date of the tax rate reduction. As a result of the decrease in the federal rate, the Company recognized a decrease in its net deferred tax liabilities of $2,726 in the second quarter of fiscal 2018, with a corresponding reduction to deferred income tax expense. Excluding the impact of the adjustment to deferred tax expense, the effective income tax rates were 29.3% and 33.5% in the second quarter and six-month period of fiscal 2018, respectively.

Net Income. Net income was ~~$9,511~~$3,360 in the ~~second quarter of fiscal 2018~~13 weeks ended October 24, 2020 compared to ~~$5,992~~$2,567 in the ~~second quarter~~13 weeks ended October 26, 2019. The 13 weeks ended October 26, 2019 included pre-opening costs of the ~~prior year. The second quarter~~Stroudsburg, Pennsylvania replacement store of ~~fiscal 2018 includes a $2,726 non-cash reduction in deferred tax expense as a result~~$594 (net of tax) and store closure costs and charges to write off the ~~Tax Act.~~lease asset and related obligations for the old Stroudsburg store of $191 (net of tax). Excluding ~~this item from the second quarter of fiscal 2018,~~these items, net income ~~increased 13%~~was flat in the ~~second quarter of fiscal 2018~~13 weeks ended October 24, 2020 compared to the prior ~~year primarily~~year. Net income was flat despite the increase in same store sales due to the ~~favorable~~ impact of ~~a reduction~~lower sales volumes in ~~the fiscal 2018 estimated effective tax rate to 33.5%~~Manhattan, higher costs as ~~a result of the Tax Act.~~

Net income was $12,528 in the six-month period of fiscal 2018 compared to $10,101 in the six-month period of the prior year. Fiscal 2018 includes a $2,726 non-cash reduction in deferred tax expense as a result of the Tax Act. Excluding this item, net income decreased 3% in the six-month period of fiscal 2018 compared to the prior year primarily due to higherwe transition and integrate commissary operations into our business and increased operating and administrative ~~expenses partially offset by the favorable impact of a reduction in the fiscal 2018 estimated effective tax rate to 33.5% as a result of the Tax Act.~~expenses.

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 ~~29, 2017. As no material uncertain tax positions remain in the Company’s financial condition and results~~25, 2020. As of ~~operations, the Company has updated its critical accounting policies to exclude accounting for uncertain tax positions. As of January 27, 2018,~~October 24, 2020, there have been no ~~other~~ changes to 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.

Net cash used in operating activities was $3,353 in the 13 weeks ended October 24, 2020 compared to net cash provided by operating activities ~~was $28,424 in the six-monthperiod~~ of ~~fiscal 2018 compared to $15,146~~$3,375 in the corresponding period of the prior year. The ~~increase~~change in ~~net~~ cash ~~provided by~~flows from operating activities in fiscal ~~2018~~2021 was primarily due to changes in working ~~capital and net income adjusted for non-cash expenses including depreciation and amortization, share-based compensation and deferred taxes.~~capital. Working capital changes, including Other assets and ~~Other~~ liabilities, ~~increased net~~decreased cash ~~provided~~

~~by operating activities in fiscal 2018 by $3,775 and decreased net cash provided by~~flows from operating activities by ~~$8,645~~$15,530 in fiscal ~~2017.~~2021 compared to a decrease of $8,733 in fiscal 2020. The ~~larger~~change in impact of working capital ~~changes in fiscal 2017~~ is due primarily to ~~changes~~higher merchandise inventories and a larger decrease in ~~income taxes receivable/~~accounts payable to Wakefern as ~~a result of~~stock levels and inventory turnover normalized through the ~~timing of estimated tax payments.~~pandemic.

During the ~~six-monthperiod of fiscal 2018,~~13 weeks ended October 24, 2020, Village used cash to fund capital expenditures of ~~$12,731,~~$3,301, dividends of ~~$6,439~~$3,257 and ~~invested an~~ additional ~~$1,051~~investments of $567 in notes receivable from ~~Wakefern, net of proceeds received on matured notes.~~Wakefern. Capital expenditures primarily include costs associated with the integration of Fairway stores, continued expansion of self checkout and equipment purchases.

Village has budgeted $35,000 for capital expenditures in fiscal 2021. Planned expenditures include two major remodels, several smaller ~~remodels.~~store remodels, continued expansion of ShopRite from Home and self-checkout, and various merchandising, technology, equipment and facility upgrades.The Company’s primary sources of liquidity in fiscal 2021 are expected to be cash and cash equivalents on hand at October 24, 2020 and operating cash flow generated in fiscal 2021.

At ~~January 27, 2018,~~October 24, 2020, the Company ~~had $45,731 in~~held variable rate notes receivable due from Wakefern of $26,426 that earn interest at the prime rate plus ~~$1.25% with $23,265 that mature on February 15, 2019~~1.25% and ~~$22,466 that~~ mature on August 15, ~~2022. On August 15, 2017, notes receivable due from Wakefern of $22,142~~2022 and $27,149 that ~~earned~~earn interest at the prime rate plus ~~.25% matured. The Company invested $22,000 of the proceeds received in variable rate notes receivable from Wakefern that~~.75% and mature on ~~August~~February 15, ~~2022.~~2024. Wakefern has the right to prepay these notes at any time. Under certain conditions, the Company can require Wakefern to prepay the notes, although interest earned since inception would be reduced as if it was earned based on overnight money market rates as paid by Wakefern on demand deposits.

Village has revised its budgeted capital expenditures downward from prior estimates to approximately $30,000 for fiscal 2018 due to delays in the timing of certain projects. Planned expenditures include construction of a new store in the Bronx, New York, two major remodels, several smaller remodels and various technology upgrade projects. The Company’s primary sources of liquidity in fiscal 2018 are expected to be cash and cash equivalents on hand at January 27, 2018, operating cash flow generated in fiscal 2018 and funding through the New Markets Tax Credit program as described in note 8 to the unaudited consolidated financial statements.

Working capital was ~~$59,888~~$38,583 at ~~January 27, 2018~~October 24, 2020 compared to ~~$85,279~~$34,522 at July ~~29, 2017.~~25, 2020. Working capital ratios at the same dates were ~~1.61~~1.25 and ~~1.89~~1.21 to 1,one, respectively. The decrease in working capital in fiscal 2018 compared to fiscal 2017 is due primarily to maturity of $22,142 in notes receivable from Wakefern, of which $22,000 was reinvested in long-term notes receivable from Wakefern. The Company’s working capital needs are reduced, since inventories are generally sold by the time payments to Wakefern and other suppliers are due.

This Form 10-Q contains certain forward-looking statements about Village’s future performance. These statements are based on management’s assumptions and beliefs in light of information currently available. Such statements relate to, for example: same store sales; economic conditions; expected pension plan contributions; projected capital expenditures; cash flow requirements; inflation expectations; and legal matters; and are indicated by words such as “will,” “expect,” “should,” “intend,” “anticipates,” “believes” and similar words or phrases. The Company cautions the reader that there is no assurance that actual results or business conditions will not differ materially from the results expressed, suggested or implied by such ~~forward-looking~~forward-

•We have ~~revised~~ budgeted $35,000 for capital expenditures ~~downward from prior estimates to approximately $30,000 for~~in fiscal ~~2018 due to delays in the timing of certain projects.~~2021. Planned expenditures include ~~construction of a new store in the Bronx, New York,~~ two major remodels, several smaller store remodels, continued expansion of ShopRite from Home and self-checkout, and various merchandising, technology, ~~upgrade projects.~~equipment and facility upgrades.

•The Company operates in and around one of the epicenters of the COVID-19 health crisis with much of our trade area under stay-at-home orders from mid-March 2020 through June 2020. The Company is classified as an essential business and has remained open to serve our customers and the communities in which we operate. The continuing impact on our business, including the length and impact of stay-at-home orders and/or regional quarantines, labor shortages and employment trends, disruptions to supply chains, higher operating costs, the form and impact of economic stimulus and general overall economic instability, is uncertain at this time and could have a material adverse effect on our business, results of operations, financial condition and cash flows. Furthermore, the impact of the COVID-19 health crisis may exacerbate other risks and uncertainties included herein, which could have a material effect on the Company.

•The Fairway acquisition involves a number of risks, uncertainties and challenges, including under-performance relative to our expectations, additional capital requirements, unforeseen expenses or delays, imprecise assumptions or our inability to achieve projected cost savings or other synergies, competitive factors in the marketplace and difficulties integrating the business, including merging company cultures, cultivating brand strategy, expansion of food production and conforming the acquired company's technology, standards, processes, procedures and controls.Sales and operating profits have underperformed compared to initial expectations due primarily to residential population migration out of Manhattan and less commuter and tourist traffic during the COVID-19 pandemic. Many of these potential circumstances are outside of our control and any of them could result in an adverse impact on our results of operations, financial condition and cash flows and the diversion of management time and resources.

•The supermarket business is highly competitive and characterized by narrow profit margins. Results of operations may be materially adversely impacted by competitive pricing and promotional programs, industry consolidation and competitor store openings. Village competes directly with multiple retail formats both in-store and online, including national, regional and local supermarket chains as well as warehouse clubs, supercenters, drug stores, discount general merchandise stores, fast food chains, restaurants, dollar stores and convenience stores. Some of these competitors have greater financial resources, lower merchandise acquisition costs and lower operating expenses than we do.

•The Company’s stores are concentrated in New Jersey, ~~with two stores in Maryland~~New York, Pennsylvania and ~~one in northeastern Pennsylvania.~~Maryland. We are vulnerable to economic downturns in ~~New Jersey~~these states in addition to those that may affect the country as a whole. Economic conditions such as inflation, deflation, interest rate fluctuations, movements in energy costs, social programs, minimum wage legislation, unemployment rates, disturbances due to social unrest and changing demographics may adversely affect our sales and profits.

•Village purchases substantially all of its merchandise from Wakefern. In addition, Wakefern provides the Company with support services in numerous areas including advertising, liability and property insurance, supplies, certain equipment purchasing, coupon processing, certain financial accounting applications, retail technology support, and other store services. Further, Village receives patronage dividends and other product incentives from Wakefern and also has demand deposits and notes receivable due from Wakefern.

Any material change in Wakefern’s method of operation or a termination or material modification of Village’s relationship with Wakefern could have an adverse impact on the conduct of the Company’s business and could involve additional expense for Village. The failure of any Wakefern member to fulfill its obligations to Wakefern or a member’s insolvency or withdrawal from Wakefern could result in increased costs to the Company. Additionally, an adverse change in Wakefern’s results of operations or solvency could have an adverse effect on Village’s results of operations.

•Certain of the multi-employer plans to which we contribute are underfunded. As a result, we expect that contributions to these plans may increase. Additionally, the benefit levels and related items will be issues in the negotiation of our collective bargaining agreements. Under current law, an employer that withdraws or partially withdraws from a multi-employer pension plan may incur a withdrawal liability to the plan, which represents the portion of the plan’s underfunding that is allocable to the withdrawing employer under very complex actuarial and allocation rules. The failure of a withdrawing employer to fund these obligations can impact remaining employers. The amount of any increase or decrease in our required contributions to these multi-employer pension plans will depend upon the outcome of collective bargaining, actions taken by trustees who manage the plans, government regulations, withdrawals by other participating employers and the actual return on assets held in the plans, among other factors.

•The Company uses a combination of insurance and self-insurance to provide for potential liability for workers’ compensation, automobile and general liability, property, director and officers’ liability, and certain employee health care benefits. Any projection of losses is subject to a high degree of variability. Changes in legal claims, trends and interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, and insolvency of insurance carriers could all affect our financial condition, results of operations, or cash flows.

•Wakefern provides all members of the cooperative with information system support that enables us to effectively manage our business data, customer transactions, ordering, communications and other business processes. These information systems are subject to damage or interruption from power outages, computer or telecommunications failures, computer viruses and related malicious software, catastrophic weather events, or human error. Any material interruption of our or Wakefern’s information systems could have a material adverse impact on our results of operations.

Due to the nature of our business, personal information about our customers, vendors and associates is received and stored in these information systems. In addition, confidential information is transmitted through our ShopRite from Home online business at shoprite.com and through the ShopRite app. Unauthorized parties may attempt to access information stored in or to sabotage or disrupt these systems. Wakefern and the Company maintain substantial security measures to prevent and detect unauthorized access to such information, including utilizing third-party service providers for monitoring our networks, security reviews, and other functions. It is possible that computer hackers, cyber terrorists and others may be able to defeat the security measures in place at the Company, Wakefern or those of third-party service providers.

Any breach of these security measures and loss of confidential information, which could be undetected for a period of time, could damage our reputation with customers, vendors and associates, cause Wakefern and Village to incur significant costs to protect any customers, vendors and associates whose personal data was compromised, cause us to make changes to our information systems and could result in government enforcement actions and litigation against Wakefern and/or Village from outside parties. Any such breach could have a material adverse impact on our operations, consolidated financial condition, results of operations, and liquidity if the related costs to Wakefern and Village are not covered or are in excess of carried insurance policies. In addition, a security breach could require Wakefern and Village to devote significant management resources to address problems created by the security breach and restore our reputation.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company expects to adopt the new standard in the first quarter of its fiscal year ending July 27, 2019. The Company does not anticipate it will have a material impact on its recognition of revenue at the point of sale, and is continuing to identify and assess transactions that may be affected by the new standard.

In February 2016, the FASB issued ASU 2016-02, "Leases." This guidance requires lessees to recognize lease liabilities and a right-of-use asset for all leases with terms of more than 12 months on the balance sheet. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with earlier adoption permitted. The Company expects to adopt the new standard in the first quarter of its fiscal year ending July 25, 2020. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption. The adoption of ASU 2016-02 will result in a significant increase to the Company’s Consolidated Balance Sheets for lease liabilities and right-of-use assets, and the Company is currently evaluating the other effects of adoption of this standard on its consolidated financial statements and related disclosures.

In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which will allow a reclassification from accumulated other comprehensive income to retained earnings for the tax effects resulting from the Tax Act that are stranded in accumulated other comprehensive income. This standard also requires certain disclosures about stranded tax effects. This ASU, however, does not change the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. The new guidance is effective for the first interim and annual periods beginning after December 15, 2018, with early adoption permitted. It must be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company is currently evaluating the effects of adoption of this standard on its consolidated financial statements and related disclosures.

At January 27, 2018, the Company had $45,731 in notes receivable due from Wakefern that earn interest at the prime rate plus $1.25% with $23,265 that mature on February 15, 2019 and $22,466 that mature on August 15, 2022. Wakefern has the right to prepay these notes at any time. Under certain conditions, the Company can require Wakefern to prepay the notes, although interest earned since inception would be reduced as if it was earned based on overnight money market rates as paid by Wakefern on demand deposits.

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 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

~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

Period(1) Total Number of Shares Purchased(2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs
October 29, 2017 to November 25, 2017 — $— — $2,008,972
November 26, 2017 to December 23, 2017 8,893 $23.02 8,893 $1,804,255
December 24, 2017 to January 27, 2018 11,845 $23.02 11,845 $1,531,583
Total 20,738 $23.02 20,738 $1,531,583

(2) Includes shares repurchased under a $5.0 million repurchase program of the Company's Class A Common Stock authorized by the Board of Directors and announced on June 12, 2015. Repurchases may be made from time-to-time through a variety of methods, including open market purchases and other negotiated transactions, including through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934.



~~Item 6.~~		~~Exhibits~~
Exhibit 31.1		Certification
~~Exhibit 31.1~~		~~Certification~~
Exhibit 31.2		Certification
~~Exhibit 31.2~~		~~Certification~~

Exhibit 32.1	Certification (furnished, not filed)

Exhibit 32.2		Certification (furnished, not filed)

Exhibit 99.1		Press Release

101 INS		XBRL Instance

101 SCH		XBRL Schema

101 CAL		XBRL Calculation

101 DEF		XBRL Definition

101 LAB		XBRL Label

101 PRE		XBRL Presentation



~~[x]~~ ☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

			For the quarterly period ~~ended: January 27, 2018~~ended October 24, 2020

OR

~~[ ]~~ ☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File No. 0-2633



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

		~~March 7, 2018~~December 2, 2020

	Class A Common Stock, No Par Value	~~10,065,045~~10,262,088 Shares
	Class B Common Stock, No Par Value	~~4,303,748~~4,293,748 Shares


	13 Weeks Ended
		October 24, 2020	October 26, 2019
			Amount		%		Amount		%
Center Store (1)			$	295,940	60.4	%	$	248,057	60.9	%
Fresh (2)			175,644		35.8		140,680		34.5
Pharmacy			16,432		3.4		17,524		4.3
Other (3)			2,120		0.4		1,141		0.3

Total Sales			$	490,136	100.0	%	$	407,402	100.0	%


	October 24, 2020		July 25, 2020
Unsecured revolving line of credit	$	0	$	50,000
Secured term loan	49,505		0
Unsecured term loan	23,797		24,694
New Market Tax Credit Financing	5,860		5,921

Total debt, excluding obligations under leases	79,162		80,615
Less current portion	6,976		6,421

Total long-term debt, excluding obligations under leases	$	72,186	$	74,194



			Village Super Market, Inc.
			Registrant

Dated: ~~March 8, 2018~~December 3, 2020			/s/ Robert P. Sumas
			Robert P. Sumas
			(Chief Executive Officer)

Dated: ~~March 8, 2018~~December 3, 2020			/s/ John Van Orden
			John Van Orden
			(Chief Financial Officer)

VILLAGE SUPER MARKET, INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	January 27, 2018			July 29, 2017
ASSETS
Current assets
Cash and cash equivalents	$	89,738		$	87,435
Merchandise inventories	42,346			41,852
Patronage dividend receivable	4,850			12,655
Notes receivable from Wakefern	—			22,118
Income taxes receivable	2,673			1,742
Other current assets	18,424			15,670
Total current assets	158,031			181,472

Property, equipment and fixtures, net	205,401			204,440
Notes receivable from Wakefern	45,731			22,562
Investment in Wakefern	27,093			27,093
Goodwill	12,057			12,057
Other assets	19,574			7,601

Total assets	$	467,887		$	455,225

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Capital and financing lease obligations	$	714		$	652
Notes payable to Wakefern	254			292
Accounts payable to Wakefern	63,332			59,556
Accounts payable and accrued expenses	16,401			17,279
Accrued wages and benefits	16,620			17,810
Income taxes payable	822			604
Total current liabilities	98,143			96,193

Long-term debt
Capital and financing lease obligations	42,167			42,532
Notes payable to Wakefern	6			114
Notes payable related to New Markets Tax Credit	6,563			—
Total long-term debt	48,736			42,646

Pension liabilities	14,431			15,194
Other liabilities	12,393			14,372

Commitments and contingencies

Shareholders' equity
Preferred stock, no par value: Authorized 10,000 shares, none issued	—			—
Class A common stock, no par value: Authorized 20,000 shares; issued 10,569 shares at January 27, 2018 and 10,562 shares at July 29, 2017	59,573			57,852
Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,304 shares at January 27, 2018 and July 29, 2017	699			699
Retained earnings	250,397			244,308
Accumulated other comprehensive loss	(7,220		)	(7,406		)
Less treasury stock, Class A, at cost: 504 shares at January 27, 2018 and 477 shares at July 29, 2017	(9,265		)	(8,633		)
Total shareholders’ equity	294,184			286,820

Total liabilities and shareholders’ equity	$	467,887		$	455,225

VILLAGE SUPER MARKET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)

	13 Weeks Ended						26 Weeks Ended
	January 27, 2018			January 28, 2017			January 27, 2018			January 28, 2017
Sales	$	417,382		$	412,215		$	803,856		$	801,907

Cost of sales	305,097			300,977			587,691			586,021

Gross profit	112,285			111,238			216,165			215,886

Operating and administrative expense	96,066			94,393			188,358			185,524

Depreciation and amortization	6,386			6,233			12,621			12,296

Operating income	9,833			10,612			15,186			18,066

Interest expense	(1,102		)	(1,114		)	(2,207		)	(2,230		)

Interest income	864			648			1,764			1,335

Income before income taxes	9,595			10,146			14,743			17,171

Income taxes	84			4,154			2,215			7,070

Net income	$	9,511		$	5,992		$	12,528		$	10,101

Net income per share:
Class A common stock:
Basic	$	0.74		$	0.47		$	0.97		$	0.80
Diluted	$	0.66		$	0.42		$	0.87		$	0.71

Class B common stock:
Basic	$	0.48		$	0.31		$	0.63		$	0.52
Diluted	$	0.48		$	0.31		$	0.63		$	0.52


~~(1)~~	Amounts are net of tax of $41 and $154 for the 13 weeks ended January 27, 2018 and January 28, 2017, respectively, and $98 and $264 for the 26 weeks ended January 27, 2018 and January 28, 2017, respectively. All amounts are reclassified from accumulated other comprehensive loss to operating and administrative expense.



	13 Weeks Ended					26 Weeks Ended
	January 27, 2018					January 27, 2018
	Class A		Class B			Class A		Class B
Numerator:
Net income allocated, basic	$	7,174	$	2,065		$	9,452	$	2,721
Conversion of Class B to Class A shares	2,065		—			2,721		—
Effect of share-based compensation on allocated net income	—		—			—		—
Net income allocated, diluted	$	9,239	$	2,065		$	12,173	$	2,721

Denominator:
Weighted average shares outstanding, basic	9,714		4,304			9,718		4,304
Conversion of Class B to Class A shares	4,304		—			4,304		—
Dilutive effect of share-based compensation	—		—			—		—
Weighted average shares outstanding, diluted	14,018		4,304			14,022		4,304

	13 Weeks Ended					26 Weeks Ended
	January 28, 2017					January 28, 2017
	Class A		Class B			Class A		Class B
Numerator:
Net income allocated, basic	$	4,548	$	1,327		$	7,664	$	2,239
Conversion of Class B to Class A shares	1,327		—			2,239		—
Effect of share-based compensation on allocated net income	6		(3		)	8		(3		)
Net income allocated, diluted	$	5,881	$	1,324		$	9,911	$	2,236

Denominator:
Weighted average shares outstanding, basic	9,613		4,319			9,603		4,319
Conversion of Class B to Class A shares	4,319		—			4,319		—
Dilutive effect of share-based compensation	52		—			50		—
Weighted average shares outstanding, diluted	13,984		4,319			13,972		4,319



Period(1)	Total Number of Shares Purchased(2)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs
October 29, 2017 to November 25, 2017	—	$—	—	$2,008,972
November 26, 2017 to December 23, 2017	8,893	$23.02	8,893	$1,804,255
December 24, 2017 to January 27, 2018	11,845	$23.02	11,845	$1,531,583
Total	20,738	$23.02	20,738	$1,531,583


~~(1)~~ Item 6.			~~The reported periods conform to our fiscal calendar.~~Exhibits


~~(2)~~	~~Amount is net of tax of $257.~~