UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)


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

			For the quarterly period ended ~~April 30,~~October 29, 2022

OR

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

Commission File No. 0-2633

VILLAGE SUPER MARKET, INC.

(Exact name of registrant as specified in its charter)

New Jersey

22-1576170

(State or other jurisdiction of incorporation or organization)

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

733 Mountain Avenue, Springfield, New Jersey, 07081

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area 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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12-b2 of the Exchange Act.


Large accelerated filer ☐						Accelerated filer ☒
Non-accelerated filer ☐ (Do not check if a smaller reporting company)						Smaller reporting company ☒
						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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.


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

		~~June 8,~~December 7, 2022

	Class A Common Stock, No Par Value	~~10,222,404~~10,218,646 Shares
	Class B Common Stock, No Par Value	4,293,748 Shares

VILLAGE SUPER MARKET, INC.

INDEX


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

Consolidated Statements of Shareholders' Equity			6

Consolidated Statements of Cash Flows			7

Notes to Consolidated Financial Statements			8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			1413

Item 3. Quantitative & Qualitative Disclosures about Market Risk			2320

Item 4. Controls and Procedures			2320

PART II

OTHER INFORMATION

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~			24

Item 6. Exhibits			2421

Signatures			2522

PART I - FINANCIAL INFORMATION

~~Item~~ITEM 1. ~~Financial Statements~~FINANCIAL STATEMENTS


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)	VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)					VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
		April 30, 2022		July 31, 2021			October 29, 2022		July 30, 2022
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	119,915	$	116,314	Cash and cash equivalents	$	119,247	$	134,832
Merchandise inventories	Merchandise inventories	46,429		42,633		Merchandise inventories	48,545		44,190
Patronage dividend receivable	Patronage dividend receivable	8,366		11,860		Patronage dividend receivable	16,984		12,239
Notes receivable from Wakefern	Notes receivable from Wakefern	28,262		—		Notes receivable from Wakefern	—		28,627

Income taxes receivable	Income taxes receivable	5,011		5,111		Income taxes receivable	425		631
Other current assets	Other current assets	17,077		20,398		Other current assets	18,126		17,446
Total current assets	Total current assets	225,060		196,316		Total current assets	203,327		237,965

Property, equipment and fixtures, net	Property, equipment and fixtures, net	267,910		256,154		Property, equipment and fixtures, net	267,839		265,333
Operating lease assets	Operating lease assets	293,501		289,461		Operating lease assets	287,113		293,295
Notes receivable from Wakefern	Notes receivable from Wakefern	28,821		55,295		Notes receivable from Wakefern	88,701		29,157
Investment in Wakefern	Investment in Wakefern	33,004		33,004		Investment in Wakefern	33,107		33,004
Investments in Real Estate Partnerships						Investments in Real Estate Partnerships	8,438		7,162
Goodwill	Goodwill	24,190		24,190		Goodwill	24,190		24,190
Other assets	Other assets	41,292		34,584		Other assets	38,650		34,342

Total assets	Total assets	$	913,778	$	889,004	Total assets	$	951,365	$	924,448
LIABILITIES and SHAREHOLDERS' EQUITY	LIABILITIES and SHAREHOLDERS' EQUITY					LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities	Current liabilities					Current liabilities
Operating lease obligations	Operating lease obligations	$	20,856	$	21,627	Operating lease obligations	$	20,570	$	20,351
Finance lease obligations	Finance lease obligations	579		531		Finance lease obligations	613		596
Notes payable to Wakefern	Notes payable to Wakefern	675		632		Notes payable to Wakefern	1,187		1,134
Current portion of debt	Current portion of debt	7,466		6,976		Current portion of debt	8,895		7,466
Accounts payable to Wakefern	Accounts payable to Wakefern	72,591		70,792		Accounts payable to Wakefern	80,594		77,037
Accounts payable and accrued expenses	Accounts payable and accrued expenses	24,078		25,098		Accounts payable and accrued expenses	29,501		24,266
Accrued wages and benefits	Accrued wages and benefits	26,090		25,036		Accrued wages and benefits	26,524		27,221
Income taxes payable	Income taxes payable	385		1,601		Income taxes payable	4,384		98
Total current liabilities	Total current liabilities	152,720		152,293		Total current liabilities	172,268		158,169
Long-term debt	Long-term debt					Long-term debt
Operating lease obligations	Operating lease obligations	283,578		278,135		Operating lease obligations	278,382		284,300
Finance lease obligations	Finance lease obligations	21,720		22,325		Finance lease obligations	21,295		21,510
Notes payable to Wakefern	Notes payable to Wakefern	2,486		2,791		Notes payable to Wakefern	1,842		1,961
Long-term debt	Long-term debt	68,173		66,827		Long-term debt	72,797		66,264
Total long-term debt	Total long-term debt	375,957		370,078		Total long-term debt	374,316		374,035
Pension liabilities	Pension liabilities	6,519		10,182		Pension liabilities	4,654		4,569
Other liabilities	Other liabilities	17,007		14,978		Other liabilities	16,912		15,566
Commitments and contingencies		0		0
Commitments and contingencies (Note 6)						Commitments and contingencies (Note 6)
Shareholders' equity	Shareholders' equity					Shareholders' equity
Preferred stock, no par value: Authorized 10,000 shares, none issued	Preferred stock, no par value: Authorized 10,000 shares, none issued	—		—		Preferred stock, no par value: Authorized 10,000 shares, none issued	—		—
Class A common stock, no par value: Authorized 20,000 shares; issued 10,975 shares at April 30, 2022 and 10,978 shares at July 31, 2021		72,351		70,594
Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,294 shares at April 30, 2022 and July 31, 2021		697		697
Class A common stock, no par value: Authorized 20,000 shares; issued 10,971 shares at October 29, 2022 and July 30, 2022						Class A common stock, no par value: Authorized 20,000 shares; issued 10,971 shares at October 29, 2022 and July 30, 2022	73,499		72,891
Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,294 shares at October 29, 2022 and July 30, 2022						Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,294 shares at October 29, 2022 and July 30, 2022	697		697
Retained earnings	Retained earnings	297,625		293,185		Retained earnings	314,803		306,974
Accumulated other comprehensive income (loss)		5,490		(9,064)
Less treasury stock, Class A, at cost: 752 shares at April 30, 2022 and 726 shares at July 31, 2021		(14,588)		(13,939)
Accumulated other comprehensive income						Accumulated other comprehensive income	8,804		6,135
Less treasury stock, Class A, at cost: 752 shares at October 29, 2022 and July 30, 2022						Less treasury stock, Class A, at cost: 752 shares at October 29, 2022 and July 30, 2022	(14,588)		(14,588)
Total shareholders’ equity	Total shareholders’ equity	361,575		341,473		Total shareholders’ equity	383,215		372,109

Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	913,778	$	889,004	Total liabilities and shareholders’ equity	$	951,365	$	924,448

See notes to consolidated financial statements.


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)	VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)									VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
		13 Weeks Ended				39 Weeks Ended					13 Weeks Ended
		April 30, 2022		April 24, 2021		April 30, 2022		April 24, 2021				October 29, 2022		October 30, 2021
Sales	Sales	$	501,962	$	481,093	$	1,533,581	$	1,494,047	Sales		$	519,689	$	494,211

Cost of sales	Cost of sales	360,371		347,671		1,102,199		1,080,817		Cost of sales		370,404		354,031

Gross profit	Gross profit	141,591		133,422		431,382		413,230		Gross profit		149,285		140,180

Operating and administrative expense	Operating and administrative expense	137,751		121,156		385,521		371,968		Operating and administrative expense		125,562		121,283

Depreciation and amortization	Depreciation and amortization	8,130		8,418		24,925		25,925		Depreciation and amortization		8,547		8,335

Operating (loss) income		(4,290)		3,848		20,936		15,337
Operating income										Operating income		15,176		10,562

Interest expense	Interest expense	(991)		(994)		(2,923)		(2,963)		Interest expense		(1,087)		(970)

Interest income	Interest income	950		904		2,831		2,670		Interest income		1,968		976

(Loss) income before income taxes		(4,331)		3,758		20,844		15,044
Income before income taxes										Income before income taxes		16,057		10,568

Income taxes	Income taxes	(1,100)		1,184		6,617		4,554		Income taxes		4,976		3,240

Net (loss) income		$	(3,231)	$	2,574	$	14,227	$	10,490
Net income										Net income		$	11,081	$	7,328

Net (loss) income per share:
Net income per share:										Net income per share:
Class A common stock:	Class A common stock:									Class A common stock:
Basic	Basic	$	(0.25)	$	0.20	$	1.09	$	0.80	Basic		$	0.85	$	0.56
Diluted	Diluted	$	(0.22)	$	0.18	$	0.97	$	0.72	Diluted		$	0.76	$	0.50

Class B common stock:	Class B common stock:									Class B common stock:
Basic	Basic	$	(0.16)	$	0.13	$	0.71	$	0.52	Basic		$	0.55	$	0.37
Diluted	Diluted	$	(0.16)	$	0.13	$	0.71	$	0.52	Diluted		$	0.55	$	0.37

See notes to consolidated financial statements.


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)	VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)									VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)
		13 Weeks Ended				39 Weeks Ended					13 Weeks Ended
		April 30, 2022		April 24, 2021		April 30, 2022		April 24, 2021				October 29, 2022		October 30, 2021
Net (loss) income		$	(3,231)	$	2,574	$	14,227	$	10,490
Net income										Net income		$	11,081	$	7,328

Other comprehensive income:	Other comprehensive income:									Other comprehensive income:
Unrealized gains on interest rate swaps, net of tax (1)	Unrealized gains on interest rate swaps, net of tax (1)	2,572		953		4,122		2,047		Unrealized gains on interest rate swaps, net of tax (1)		2,765		791
Amortization of pension actuarial loss, net of tax (2)	Amortization of pension actuarial loss, net of tax (2)	89		101		265		304		Amortization of pension actuarial loss, net of tax (2)		(96)		88
Pension settlement loss, net of tax (3)		8,525		—		8,525		—
Pension remeasurement, net of tax (4)		1,642		—		1,642		—

Comprehensive income	Comprehensive income	$	9,597	$	3,628	$	28,781	$	12,841	Comprehensive income		$	13,750	$	8,207

(1)Amount is net of tax of ~~$1,104~~$1,242 and ~~$417~~$339 for the 13 weeks ~~April 30,~~ended October 29, 2022 and ~~April 24, 2021, respectively, and $1,767 and $896 for the 39 weeks ended April~~October 30, ~~2022 and April 24,~~ 2021, respectively.

(2)Amounts are net of tax of ~~$37~~$43 and ~~$46~~$38 for the 13 weeks ~~April 30,~~ended October 29, 2022 and ~~April 24, 2021, respectively, and $113 and $137 for the 39 weeks ended April~~October 30, ~~2022 and April 24,~~ 2021, respectively. All amounts are reclassified from accumulated other comprehensive ~~loss~~income to operating and administrative expense.

~~(3)Amounts are net of tax of $3,780. All amounts are reclassified from accumulated other comprehensive loss to operating and administrative expense.~~

~~(4)Amounts are net of tax of $702.~~

See notes to consolidated financial statements.


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands) (Unaudited)	VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands) (Unaudited)																VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands) (Unaudited)
		13 Weeks Ended April 30, 2022 and April 24, 2021																13 Weeks Ended October 29, 2022 and October 30, 2021
		Class A Common Stock			Class B Common Stock					Accumulated Other Comprehensive Income (Loss)		Treasury Stock Class A			Total Shareholders' Equity			Class A Common Stock			Class B Common Stock					Accumulated Other Comprehensive Income		Treasury Stock Class A			Total Shareholders' Equity
		Shares Issued	Amount		Shares Issued	Amount		Retained Earnings				Shares	Amount					Shares Issued	Amount		Shares Issued	Amount		Retained Earnings				Shares	Amount
Balance, January 29, 2022		10,981	$	71,808	4,294	$	697	$	304,117	$	(7,338)	730	$	(14,028)	$	355,256
Net loss		—	—		—	—		(3,231)		—		—	—		(3,231)
Other comprehensive income, net of tax of $5,623		—	—		—	—		—		12,828		—	—		12,828
Dividends		—	—		—	—		(3,261)		—		—	—		(3,261)

Treasury stock purchases		—	—		—	—		—		—		22	(560)		(560)
Restricted shares forfeited		(6)	(73)		—	—		—		—		—	—		(73)
Share-based compensation expense		—	616		—	—		—		—		—	—		616

Balance, April 30, 2022		10,975	$	72,351	4,294	$	697	$	297,625	$	5,490	752	$	(14,588)	$	361,575

Balance, January 23, 2021		10,985	$	69,324	4,294	$	697	$	287,634	$	(7,454)	726	$	(13,939)	$	336,262
Balance, July 30, 2022																	Balance, July 30, 2022	10,971	$	72,891	4,294	$	697	$	306,974	$	6,135	752	$	(14,588)	$	372,109
Net income	Net income	—	—		—	—		2,574		—		—	—		2,574		Net income	—	—		—	—		11,081		—		—	—		11,081
Other comprehensive income, net of tax of $463		—	—		—	—		—		1,054		—	—		1,054
Other comprehensive income, net of tax of $1,199																	Other comprehensive income, net of tax of $1,199	—	—		—	—		—		2,669		—	—		2,669
Dividends	Dividends	—	—		—	—		(3,262)		—		—	—		(3,262)		Dividends	—	—		—	—		(3,252)		—		—	—		(3,252)

Share-based compensation expense	Share-based compensation expense	—	640		—	—		—		—		—	—		640		Share-based compensation expense	—	608		—	—		—		—		—	—		608

Balance, April 24, 2021		10,985	$	69,964	4,294	$	697	$	286,946	$	(6,400)	726	$	(13,939)	$	337,268

Balance, October 29, 2022																	Balance, October 29, 2022	10,971	$	73,499	4,294	$	697	$	314,803	$	8,804	752	$	(14,588)	$	383,215

Balance, July 31, 2021																	Balance, July 31, 2021	10,978	$	70,594	4,294	$	697	$	293,185	$	(9,064)	726	$	(13,939)	$	341,473
Net income																	Net income	—	—		—	—		7,328		—		—	—		7,328
Other comprehensive income, net of tax of $377																	Other comprehensive income, net of tax of $377	—	—		—	—		—		879		—	—		879
Dividends																	Dividends	—	—		—	—		(3,264)		—		—	—		(3,264)

Treasury stock purchases																	Treasury stock purchases	—	—		—	—		—		—		4	(89)		(89)

Share-based compensation expense																	Share-based compensation expense	9	644		—	—		—		—		—	—		644

Balance, October 30, 2021																	Balance, October 30, 2021	10,987	$	71,238	4,294	$	697	$	297,249	$	(8,185)	730	$	(14,028)	$	346,971

		39 Weeks Ended April 30, 2022 and April 24, 2021
		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 31, 2021		10,978	$	70,594	4,294	$	697	$	293,185	$	(9,064)	726	$	(13,939)	$	341,473
Net income		—	—		—	—		14,227		—		—	—		14,227
Other comprehensive income, net of tax of $6,362		—	—		—	—		—		14,554		—	—		14,554
Dividends		—	—		—	—		(9,787)		—		—	—		(9,787)

Treasury stock purchases		—	—		—	—		—		—		26	(649)		(649)
Restricted shares forfeited		(12)	(129)		—	—		—		—		—	—		(129)
Share-based compensation expense		9	1,886		—	—		—		—		—	—		1,886

Balance, April 30, 2022		10,975	$	72,351	4,294	$	697	$	297,625	$	5,490	752	$	(14,588)	$	361,575

Balance, July 25, 2020		10,985	$	68,072	4,294	$	697	$	286,241	$	(8,751)	726	$	(13,939)	$	332,320
Net income		—	—		—	—		10,490		—		—	—		10,490
Other comprehensive income, net of tax of $1,033		—	—		—	—		—		2,351		—	—		2,351
Dividends		—	—		—	—		(9,785)		—		—	—		(9,785)

Restricted shares forfeited		(8)	(24)		—	—		—		—		—	—		(24)
Share-based compensation expense		8	1,916		—	—		—		—		—	—		1,916

Balance, April 24, 2021		10,985	$	69,964	4,294	$	697	$	286,946	$	(6,400)	726	$	(13,939)	$	337,268

See notes to consolidated financial statements.


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)	VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)					VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
		39 Weeks Ended					13 Weeks Ended
		April 30, 2022		April 24, 2021			October 29, 2022		October 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income	Net income	$	14,227	$	10,490	Net income	$	11,081	$	7,328
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	26,060		27,003		Depreciation and amortization	8,950		8,712
Non-cash share-based compensation	Non-cash share-based compensation	1,757		1,892		Non-cash share-based compensation	608		644
Non-cash pension settlement charges		10,811		—

Deferred taxes	Deferred taxes	(3,674)		(1,539)		Deferred taxes	103		(600)
Provision to value inventories at LIFO	Provision to value inventories at LIFO	1,462		—		Provision to value inventories at LIFO	538		250

Gain on sale of property, equipment and fixtures	Gain on sale of property, equipment and fixtures	(220)		(1,031)		Gain on sale of property, equipment and fixtures	(17)		(166)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Merchandise inventories	Merchandise inventories	(5,258)		(2,837)		Merchandise inventories	(4,893)		(3,638)
Patronage dividend receivable	Patronage dividend receivable	3,494		3,464		Patronage dividend receivable	(4,745)		(4,641)
Accounts payable to Wakefern	Accounts payable to Wakefern	1,538		(6,485)		Accounts payable to Wakefern	3,760		5,634
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(1,747)		(4,076)		Accounts payable and accrued expenses	3,389		(1,655)
Accrued wages and benefits	Accrued wages and benefits	1,054		(502)		Accrued wages and benefits	(697)		(1,764)
Income taxes receivable / payable	Income taxes receivable / payable	(1,116)		4,611		Income taxes receivable / payable	4,492		(1,210)
Other assets and liabilities	Other assets and liabilities	3,314		2,005		Other assets and liabilities	(550)		(1,007)
Net cash provided by operating activities	Net cash provided by operating activities	51,702		32,995		Net cash provided by operating activities	22,019		7,887
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(36,834)		(14,901)		Capital expenditures	(9,813)		(13,343)
Proceeds from the sale of assets	Proceeds from the sale of assets	4,225		1,076		Proceeds from the sale of assets	17		173
Investment in notes receivable from Wakefern	Investment in notes receivable from Wakefern	(1,788)		(1,708)		Investment in notes receivable from Wakefern	(59,767)		(592)

Maturity of notes receivable from Wakefern						Maturity of notes receivable from Wakefern	28,850		—

Investment in real estate partnership	Investment in real estate partnership	(4,393)		—		Investment in real estate partnership	(1,276)		—

Net cash used in investing activities	Net cash used in investing activities	(38,790)		(15,533)		Net cash used in investing activities	(41,989)		(13,762)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	7,350		50,000		Proceeds from issuance of long-term debt	10,000		—
Principal payments of long-term debt	Principal payments of long-term debt	(6,174)		(6,459)		Principal payments of long-term debt	(2,352)		(1,999)

Payments on revolving line of credit		—		(50,000)

Debt issuance costs	Debt issuance costs	(51)		(222)		Debt issuance costs	(11)		—
Dividends	Dividends	(9,787)		(9,785)		Dividends	(3,252)		(3,264)
Treasury stock purchases, including shares surrendered for withholding taxes	Treasury stock purchases, including shares surrendered for withholding taxes	(649)		—		Treasury stock purchases, including shares surrendered for withholding taxes	—		(89)
Net cash used in financing activities		(9,311)		(16,466)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	4,385		(5,352)

NET INCREASE IN CASH AND CASH EQUIVALENTS		3,601		996
NET DECREASE IN CASH AND CASH EQUIVALENTS						NET DECREASE IN CASH AND CASH EQUIVALENTS	(15,585)		(11,227)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	116,314		111,681		CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	134,832		116,314

CASH AND CASH EQUIVALENTS, END OF PERIOD	CASH AND CASH EQUIVALENTS, END OF PERIOD	$	119,915	$	112,677	CASH AND CASH EQUIVALENTS, END OF PERIOD	$	119,247	$	105,087

SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS MADE FOR:	SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS MADE FOR:					SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS MADE FOR:
Interest	Interest	$	2,923	$	2,963	Interest	$	1,087	$	970
Income taxes	Income taxes	$	17,740	$	1,475	Income taxes	$	380	$	5,050

NONCASH SUPPLEMENTAL DISCLOSURES:	NONCASH SUPPLEMENTAL DISCLOSURES:					NONCASH SUPPLEMENTAL DISCLOSURES:
Investment in Wakefern and increase in notes payable to Wakefern		$	—	$	351

Capital expenditures included in accounts payable and accrued expenses	Capital expenditures included in accounts payable and accrued expenses	$	4,152	$	3,779	Capital expenditures included in accounts payable and accrued expenses	$	5,427	$	3,693

See notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) (Unaudited)

1. BASIS OF PRESENTATION and ACCOUNTING POLICIES

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 ~~April 30,~~October 29, 2022 and the consolidated statements of operations, comprehensive income and cash flows for the 13 ~~and 39~~ weeks ended ~~April 30,~~October 29, 2022 and ~~April 24,~~October 30, 2021 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 ~~31, 2021~~30, 2022 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 ~~April 30,~~October 29, 2022 are not necessarily indicative of the results to be expected for the full year.

Disaggregated Revenues

The following table presents the Company's sales by product categories during each of the periods indicated:


		13 Weeks Ended								39 Weeks Ended									13 Weeks Ended
		April 30, 2022				April 24, 2021				April 30, 2022				April 24, 2021						October 29, 2022	October 30, 2021
		Amount		%		Amount		%		Amount		%		Amount		%					Amount		%		Amount		%
Center Store (1)	Center Store (1)	$	297,892	59.4	%	$	286,882	59.6	%	$	918,228	59.9	%	$	904,651	60.6	%	Center Store (1)			$	311,824	60.0	%	$	295,974	59.9	%
Fresh (2)	Fresh (2)	185,757		37.0		176,013		36.6		559,909		36.5		533,622		35.7		Fresh (2)			189,008		36.4		179,823		36.4
Pharmacy	Pharmacy	16,761		3.3		16,303		3.4		50,365		3.3		49,406		3.3		Pharmacy			17,169		3.3		16,848		3.4
Other (3)	Other (3)	1,552		0.3		1,895		0.4		5,079		0.3		6,368		0.4		Other (3)			1,688		0.3		1,566		0.3

Total Sales	Total Sales	$	501,962	100.0	%	$	481,093	100.0	%	$	1,533,581	100.0	%	$	1,494,047	100.0	%	Total Sales			$	519,689	100.0	%	$	494,211	100.0	%

(1) Consists primarily of grocery, dairy, frozen, health and beauty care, general merchandise and liquor.

(2) Consists primarily of produce, meat, deli, seafood, bakery, prepared foods and floral.

(3) Consists primarily of sales related to other income streams, including service fees related to digital sales, gift card and lottery commissions and wholesale sales.

2. MERCHANDISE INVENTORIES

At both ~~April 30,~~October 29, 2022 and July ~~31, 2021,~~30, 2022, approximately ~~62%~~61% of merchandise inventories are valued by the LIFO method while the balance is valued by FIFO. If the FIFO method had been used for the entire inventory, inventories would have been ~~$16,783~~$19,154 and ~~$15,321~~$18,616 higher than reported at ~~April 30,~~October 29, 2022 and July ~~31, 2021,~~30, 2022, respectively.

3. NET INCOME PER SHARE

The Company has 2two classes of common stock. Class A common stock is entitled to cash dividends as declared 54% greater than those paid on Class B common stock. Shares of Class B common stock are convertible on a share-for-share basis for Class A common stock at any time.

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.

The table below reconciles Net ~~(loss)~~ income to Net ~~(loss)~~ income available to Class A and Class B shareholders:

13 Weeks Ended 39 Weeks Ended
April 30,
2022 April 24,
2021 April 30,
2022 April 24,
2021
Net (loss) income $ (3,231) $ 2,574 $ 14,227 $ 10,490
Distributed and allocated undistributed Net (loss) income to unvested restricted shareholders (93) 82 429 336
Net (loss) income available to Class A and Class B shareholders $ (3,138) $ 2,492 $ 13,798 $ 10,154


	13 Weeks Ended
		October 29, 2022		October 30, 2021
Net income		$	11,081	$	7,328
Distributed and allocated undistributed Net income to unvested restricted shareholders		304		224
Net income available to Class A and Class B shareholders		$	10,777	$	7,104

The tables below reconcile the numerators and denominators of basic and diluted Net ~~(loss)~~ income per share for all periods presented.


		13 Weeks Ended				39 Weeks Ended					13 Weeks Ended
		April 30, 2022				April 30, 2022					October 29, 2022
		Class A		Class B		Class A		Class B				Class A		Class B
Numerator:	Numerator:									Numerator:
Net (loss) income allocated, basic		$	(2,447)	$	(691)	$	10,757	$	3,041
Net income allocated, basic										Net income allocated, basic		$	8,402	$	2,376
Conversion of Class B to Class A shares	Conversion of Class B to Class A shares	(691)		—		3,041		—		Conversion of Class B to Class A shares		2,376		—
Effect of share-based compensation on allocated net (loss) income		(19)		(14)		—		—
Net (loss) income allocated, diluted		$	(3,157)	$	(705)	$	13,798	$	3,041

Net income allocated, diluted										Net income allocated, diluted		$	10,778	$	2,376

Denominator:	Denominator:									Denominator:
Weighted average shares outstanding, basic	Weighted average shares outstanding, basic	9,876		4,294		9,871		4,294		Weighted average shares outstanding, basic		9,863		4,294
Conversion of Class B to Class A shares	Conversion of Class B to Class A shares	4,294		—		4,294		—		Conversion of Class B to Class A shares		4,294		—

Weighted average shares outstanding, diluted	Weighted average shares outstanding, diluted	14,170		4,294		14,165		4,294		Weighted average shares outstanding, diluted		14,157		4,294

		13 Weeks Ended				39 Weeks Ended					13 Weeks Ended
		April 24, 2021				April 24, 2021					October 30, 2021
		Class A		Class B		Class A		Class B				Class A		Class B
Numerator:	Numerator:									Numerator:
Net income allocated, basic	Net income allocated, basic	$	1,943	$	551	$	7,914	$	2,242	Net income allocated, basic		$	5,538	$	1,566
Conversion of Class B to Class A shares	Conversion of Class B to Class A shares	551		—		2,242		—		Conversion of Class B to Class A shares		1,566		—

Net income allocated, diluted	Net income allocated, diluted	$	2,494	$	551	$	10,156	$	2,242	Net income allocated, diluted		$	7,104	$	1,566

Denominator:	Denominator:									Denominator:
Weighted average shares outstanding, basic	Weighted average shares outstanding, basic	9,850		4,294		9,850		4,294		Weighted average shares outstanding, basic		9,864		4,294
Conversion of Class B to Class A shares	Conversion of Class B to Class A shares	4,294		—		4,294		—		Conversion of Class B to Class A shares		4,294		—

Weighted average shares outstanding, diluted	Weighted average shares outstanding, diluted	14,144		4,294		14,144		4,294		Weighted average shares outstanding, diluted		14,158		4,294

Outstanding stock options to purchase Class A shares of ~~102~~93 and ~~156~~102 were excluded from the calculation of diluted net income per share at ~~April 30,~~October 29, 2022 and ~~April 24,~~October 30, 2021, respectively, as a result of their anti-dilutive effect. In addition, 363 and ~~398~~388 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 ~~April 30,~~October 29, 2022 and ~~April 24,~~October 30, 2021, respectively, due to their anti-dilutive effect.

4. PENSION PLANS

Net periodic pension cost for the 3two defined benefit pension plans sponsored in fiscal ~~2022~~2023 and ~~2021~~the three defined

benefit pension plans sponsored in fiscal 2022 includes the following components:


		13 Weeks Ended				39 Weeks Ended					13 Weeks Ended
		April 30, 2022		April 24, 2021		April 30, 2022		April 24, 2021				October 29, 2022		October 30, 2021
Service cost	Service cost	$	47	$	54	$	140	$	162	Service cost		$	34	$	47
Interest cost on projected benefit obligations	Interest cost on projected benefit obligations	420		422		1,261		1,266		Interest cost on projected benefit obligations		70		420
Expected return on plan assets	Expected return on plan assets	(409)		(483)		(1,227)		(1,449)		Expected return on plan assets		(19)		(409)
Loss on settlement		12,296		—		12,296		—

Amortization of net losses	Amortization of net losses	126		147		378		441		Amortization of net losses		(139)		126
Net periodic pension cost	Net periodic pension cost	$	12,480	$	140	$	12,848	$	420	Net periodic pension cost		$	(54)	$	184

In April 2022, the Company terminated the Village Super Market, Inc. Employees’ Retirement Plan. Prior to termination, the Company made a $1,485 contribution to fully fund the plan. Plan assets were liquidated to fund lump sum distributions to participants of $37,289 and purchase annuity contracts totaling $14,930 with an insurance company for all participants who did not elect a lump sum distribution. The Company recognized a $12,296 pre-tax settlement charge as a result of the termination, including a $10,856 non-cash charge for unrecognized losses within accumulated other comprehensive loss as of the termination date. No benefit obligation or plan assets related to the Village Super Market, Inc. Employees’ Retirement Plan remain as of ~~April 30,~~October 29, 2022. The Company recognized a $12,296 pre-tax settlement charge as a result of the termination, including a $10,811 non-cash charge for unrecognized losses within accumulated other comprehensive loss as of the termination date.

Contributions to the remaining plans are expected to be immaterial in fiscal ~~2022.~~2023.

5. RELATED PARTY INFORMATION

A description of the Company’s transactions with Wakefern, its principal supplier, and with other related parties is included in the Company’s Annual Report on Form 10-K for the year ended July ~~31, 2021.~~ 30, 2022.

On August 15, 2022, notes receivable due from Wakefern of $28,850 that earned interest at the prime rate plus 1.25% matured. The Company invested all of the proceeds received in variable rate notes receivable from Wakefern that earn interest at the prime rate plus .50% and mature on August 15, 2027. On September 28, 2022, the Company invested an additional $30,000 in variable rate notes receivable from Wakefern that earn interest at the prime rate plus .50% and mature on September 28, 2027. At October 29, 2022, the Company held variable rate notes receivable due from Wakefern of $29,606 that earn interest at the prime rate plus .75% and mature on February 15, 2024, $29,078 that earn interest at the prime rate plus .50% and mature on August 15, 2027 and $30,017 that earn interest at the prime rate plus .50% and mature on September 28, 2027. 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.

Included in cash and cash equivalents at ~~April 30,~~October 29, 2022 and July ~~31, 2021~~30, 2022 are ~~$96,918~~$95,356 and ~~$86,670,~~$110,739, respectively, of demand deposits invested at Wakefern at overnight money market rates.

On April 28, 2022 the Company entered into a partnership agreement for 30% interest in the development of a retail center in Old Bridge, New Jersey, which includes a Village replacement store with future lease obligations of ~~$9,280.~~$$9,280. Village's share of project costs are estimated to be $15,000 to $20,000. As of ~~April 30,~~October 29, 2022, Village has invested ~~$4,393~~$6,286 into the real estate partnership, which is accounted for as an equity method ~~investment included in Other assets on the Consolidated Balance Sheet.~~investment.

There have been no other significant changes in the Company’s relationships or nature of transactions with related parties during the 3913 weeks ended ~~April 30,~~October 29, 2022.

6. COMMITMENTS and CONTINGENCIES

The Company is involved in other litigation incidental to the normal course of business. Company management is of the opinion that the ultimate resolution of these legal proceedings should not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.

7. DEBT

Long-term debt consists of:


		April 30, 2022		July 31, 2021			October 29, 2022		July 30, 2022

Secured term loans	Secured term loans	$	51,745	$	47,025	Secured term loans	$	49,849	$	50,796
Unsecured term loan	Unsecured term loan	18,407		21,104		Unsecured term loan	26,477		17,507
New Market Tax Credit Financing	New Market Tax Credit Financing	5,487		5,674		New Market Tax Credit Financing	5,366		5,427

Total debt, excluding obligations under leases	Total debt, excluding obligations under leases	75,639		73,803		Total debt, excluding obligations under leases	81,692		73,730
Less current portion	Less current portion	7,466		6,976		Less current portion	8,895		7,466

Total long-term debt, excluding obligations under leases	Total long-term debt, excluding obligations under leases	$	68,173	$	66,827	Total long-term debt, excluding obligations under leases	$	72,797	$	66,264

Credit Facility

~~On January 28, 2022, the~~The Company ~~entered into an amended and restated credit agreement of the Company’s~~has a $150,500 credit facility (the “Credit Facility”) with Wells Fargo National Bank, National Association (“Wells Fargo”). The ~~notable changes from the previous agreement include: (1) Modification~~principal purpose of the reference rate from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") as a result of the expected cessation of LIBOR, (2) The execution of a fifteen-year $7,350 secured term loanCredit Facility is to finance general corporate and working capital requirements, Village’s acquisition of certain Fairway assets, the ~~acquisition~~purchase of the Galloway store shopping center and ~~(3) Modification of the definition of Total Adjusted Debt for the purpose of determining the maximum adjusted debt to EBITDAR ratio financial covenant, as defined in the Credit Facility.~~certain capital expenditure projects. Among other things, the Credit Facility provides for:

•An unsecured revolving line of credit providing a maximum amount available for borrowing of $75,000. Indebtedness under this agreement bears interest at the applicable ~~SOFR~~Secured Overnight Financing Rate ("SOFR") plus 1.10% and expires on May 6, 2025.

•An unsecured $25,500 term loan issued on May 12, 2020, repayable in equal monthly installments based on a seven-year amortization schedule through May 4, 2027 and bearing interest at the applicable SOFR plus 1.46%. ~~Prior to the January 28, 2022 amendment to the credit facility, interest accrued on the unsecured term loan at the applicable LIBOR plus 1.35%.~~ An interest rate swap with notional amounts equal to the term loan fixed the base LIBOR at .41%, resulting in a fixed effective rate of 1.76%. In February 2022, the Company executed an amendment and restatement of the interest rate swap that changes the reference rate to SOFR and fixes the base SOFR at .26% per annum through May 4, 2027, resulting in a fixed effective interest rate of 1.72% on the term loan.

•A secured $50,000 term loan issued on September 1, 2020 repayable in equal monthly installments based on a fifteen-year amortization schedule through September 1, 2035 and bearing interest at the applicable SOFR plus 1.61%. ~~Prior to the January 28, 2022 amendment to the credit facility, interest accrued on the secured term loan at the applicable LIBOR plus 1.50%.~~ An interest rate swap with notional amounts equal to the term loan fixed the base LIBOR at .69%, resulting in a fixed effective rate of 2.19%. In February 2022, the Company executed an amendment and restatement of the interest rate swap related to the term loan that changes the reference rate to SOFR and fixes the base SOFR at .57% per annum through September 1, 2035, resulting in a fixed effective interest rate of 2.18% on the term loan. The term loan is secured by real properties of Village Super Market, Inc. and its subsidiaries, including the sites of three Village stores.

base SOFR at 1.41% per annum through January 28, 2037, resulting in a fixed effective interest rate of 2.91% on the term loan. The term loan is secured by the Galloway store shopping center acquired in the first quarter of fiscal 2022.

The Credit Facility also provides for up to $25,000 of letters of credit ($7,336 outstanding at ~~April 30,~~October 29, 2022), which secure obligations for store leases and construction performance guarantees to municipalities. The Credit Facility contains covenants that, among other conditions, require a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum adjusted debt to EBITDAR ratio. The Company was in compliance with all covenants of the credit agreement at ~~April 30,~~October 29, 2022. As of October 29, 2022, $67,664 remained available under the unsecured revolving line of credit.

New Markets Tax Credit Financing

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 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 debt in the consolidated balance sheets.

The NMTC is subject to 100% recapture for a period of seven years. The Company is required to be in compliance with various regulations and contractual provisions that apply to the New Markets Tax Credit arrangement. Noncompliance 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 operating and administrative expense.

8. DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to interest rate risk arising from fluctuations in ~~LIBOR and~~ SOFR related to the Company’s Credit Facility. The Company manages exposure to this risk and the variability of related cash flows primarily by the use of derivative financial instruments, specifically, interest rate swaps.

The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of ~~April 30,~~October 29, 2022, the Company had 3four interest rate swaps with an aggregate initial notional value of ~~$82,850~~$92,850 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 the reference rate. The swaps replaced the applicable reference rate 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 income ~~(loss)~~ and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in Accumulated other comprehensive income ~~(loss)~~ related to derivatives will be reclassified to interest expense as interest payments are made on the variable-rate loans. The Company reclassified ~~$89~~$243 and ~~$86~~$88 during the 13 weeks ended ~~April 30,~~October 29, 2022 and ~~April 24, 2021, respectively, and $262 and $234 during the 39 weeks ended April~~October 30, ~~2022 and April 24,~~ 2021, respectively, from Accumulated other comprehensive income ~~(loss)~~ to Interest expense.

The notional value of the interest rate swaps were ~~$70,508~~$76,656 as of ~~April 30,~~October 29, 2022. The fair value of interest rate swaps recorded in ~~other~~Other assets in the consolidated balance sheets is ~~$6,998~~$10,019 as of ~~April 30,~~October 29, 2022.

In March 2020 and January 2021, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and ASU 2021-01, "Reference Rate Reform: Scope", respectively. These standards provide temporary optional expedients and exceptions for the application of GAAP to certain contract modifications, hedging relationships, and other arrangements that are expected to be impacted by the global transition away from certain reference rates, such as LIBOR. The guidance was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. During the second quarter of fiscal 2022, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Additionally, we elected to apply expedients related to the modification of hedged transactions related to reference rate reform. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The adoption of this portion of the ASU is not expected to have a material impact to our consolidated financial statements. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In connection with the modification of the reference rate from LIBOR to SOFR in the Amended and Restated Credit Facility, in February 2022, the Company executed the amendment and restatement of 2 interest rate swaps (see note 7). The modified rates did not have a material impact to the consolidated financial statements.

1312

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in Thousands)

OVERVIEW

Village Super Market, Inc. (the “Company” or “Village”) was founded in 1937. Village operates a chain of ~~twenty-nine~~34 supermarkets in New Jersey (26), New York (6), Maryland (1) and Pennsylvania (1) under the ShopRite ~~supermarkets, five~~and Fairway ~~Markets~~banners and four Gourmet Garage specialty markets ~~located~~ in New ~~Jersey, New~~ York ~~Pennsylvania and Maryland.~~City. Village is the second largest member of Wakefern Food Corporation (“Wakefern”), the nation’s largest retailer-owned food cooperative and owner of the ShopRite, Fairway ~~Market~~ 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, advanced retail technology, marketing and advertising associated with chains of greater size and geographic coverage.

~~On April 29, 2022, Village opened a 14,600 sq. ft. Gourmet Garage in the West Village in Manhattan, NYC.~~

On February 22, 2021, Village closed the ShopRite store located in Silver Spring, Maryland. Despite continued investment in marketing and promotional programs, the store was unable to generate sales at a level sufficient to maintain profitability, resulting in its closure. The impacts associated with this closure were not material to the consolidated financial statements.

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~~The Company competes by ~~using low pricing,~~ providing a superior customer service experience, competitive pricing and a broad range of consistently available quality ~~products, including our own brands portfolio.~~products. The ShopRite Price Plus ~~preferred~~ customer loyalty 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.

Online grocery ordering for in-store pick up or home delivery is available in all of our ShopRite stores through shoprite.com, the ShopRite app or through third party service providers. Additionally, the ShopRite Order Express app enables customers to pre-order deli, catering, specialty occasion cakes and other items. Online ordering for home delivery is available in all Fairway and Gourmet Garage stores through third party service providers.

To promote production efficiency, product quality and consistency, the Company operates a centralized commissary supplying certain products in deli, bakery, prepared foods and other perishable product categories to all stores. The Company also owns and operates an automated micro-fulfillment center to facilitate online order fulfillment for the south New Jersey stores.

The Company’s stores, seven of which are owned, average 54,000 total square feet. These larger store sizes enable the ~~Company’s stores~~Company to provide a “one-stop” shopping experience and to feature expanded higher margin specialty departments such as an 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 offeringoffer a wide variety of ~~store~~national branded and locally sourced food products, including grocery, meat, produce, dairy, deli, seafood, prepared foods, bakery and frozen foods as well as non-food product offerings, including health and beauty care, general merchandise, liquor and 21 in-store pharmacies. Most product departments include high-quality, competitively priced own-brand offerings under the Wholesome Pantry, Bowl & Basket, Paperbird and Fairway brands. Our 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. Our Gourmet Garage specialty markets offer organic produce, signature soups and prepared foods, ~~for both take-home~~high-quality meat and ~~in-store dining.~~seafood, charcuterie and gourmet cheeses, artisan baked bread and pastries, chef-prepared meals to go and pantry staples.

~~Online grocery ordering for in-store pick-up~~ The Company has an ongoing program to upgrade and expand its supermarket chain. This program has included store remodels as well as the opening or ~~home delivery is available~~acquisition of additional stores. When remodeling, Village has sought, whenever possible, to increase the amount of selling space in ~~all of our ShopRite~~its stores. ~~Customers can browse our circular, create and edit shopping lists and place orders for pick-up or delivery through shoprite.com or~~On August 14, 2022, we converted the Pelham, NY store from the Fairway banner to the ShopRite ~~app.~~ ~~Additionally,~~banner and a major remodel of the ShopRite and Fairway Order Express apps enable customers to pre-order deli, catering, specialty occasion cakes and other items. Online ordering for home delivery through third party services is availablestore was completed in ~~all stores.~~late October 2022. On April 29, 2022, Village opened a 14,600 sq. ft. Gourmet Garage in the West Village in Manhattan, NYC.

We consider a variety of indicators to evaluate our performance, such as same store sales; percentage of total sales by department (mix); shrink; departmental gross profit percentage; sales per labor hour; units per labor hour; and hourly labor rates.

~~NON-GAAP MEASURES~~

The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with generally accepted accounting principles ("GAAP"). We provide non-GAAP measures, including Adjusted net income and Adjusted operating and administrative expenses as management believes these supplemental measures are useful to investors and analysts. These non-GAAP financial measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP, nor as an alternative to net income, operating and administrative expense or any other GAAP measure of performance. Adjusted net income and Adjusted operating and administrative expense are useful to investors because they provide supplemental measures that exclude the financial impact of certain items that affect period-to-period comparability. Management and the Board of Directors use these measures as they provide greater transparency in assessing ongoing operating performance on a period-to-period basis. Other companies may have different definitions of Non-GAAP Measures and provide for different adjustments, and comparability to the Company's results of operations may be impacted by such differences. The Company's presentation of Non-GAAP Measures should not be construed as an implication that its future results will be unaffected by unusual or non-recurring items.

~~The following tables reconciles Net (loss) income to Adjusted net income and Operating and administrative expenses to Adjusted operating and administrative expenses:~~

13 Weeks Ended 39 Weeks Ended
April 30,
2022 April 24,
2021 April 30,
2022 April 24,
2021
Net (loss) income $ (3,231) $ 2,574 $ 14,227 $ 10,490
Adjustments to Operating and administrative expense:
Gain on sale of assets (1) — (724) — (724)
Pension termination and settlement charges (2) 12,296 — 12,296 —
Store closure costs (3) — 325 — 325
Adjustments to Income taxes:
Tax impact of adjustments (3,780) 122 (3,780) 122
Adjusted net income $ 5,285 $ 2,297 $ 22,743 $ 10,213
Operating and administrative expense $ 137,751 $ 121,156 $ 385,521 $ 371,968
Total adjustments to operating administrative expense (12,296) 399 (12,296) 399
Adjusted operating and administrative expense $ 125,455 $ 121,555 $ 373,225 $ 372,367
Adjusted operating and administrative expense as a % of sales 24.99 % 25.27 % 24.34 % 24.92 %

~~(1) The~~ 13 ~~and 39 weeks ended April 24, 2021 includes a $724 gain on the sale of the pharmacy prescription list related to the closure of the Silver Spring, Maryland store.~~

~~(2) The 13 and 39 weeks ended April 30, 2022 includes pension termination charges of $12,296 related to the Village Super Market Inc. Employees' Retirement Plan.~~

~~(3) The 13 and 39 weeks ended April 24, 2021 includes $325 of costs related to the closure of the Silver Spring, Maryland store.~~

RESULTS OF OPERATIONS

The following table sets forth the major components of the Consolidated Statements of Operations as a percentage of sales:


		13 Weeks Ended				39 Weeks Ended					13 Weeks Ended
		April 30, 2022		April 24, 2021		April 30, 2022		April 24, 2021			October 29, 2022		October 30, 2021
Sales	Sales	100.00	%	100.00	%	100.00	%	100.00	%	Sales	100.00	%	100.00	%
Cost of sales	Cost of sales	71.79		72.27		71.87		72.34		Cost of sales	71.27		71.64
Gross profit	Gross profit	28.21		27.73		28.13		27.66		Gross profit	28.73		28.36
Operating and administrative expense	Operating and administrative expense	27.44		25.18		25.14		24.90		Operating and administrative expense	24.16		24.54
Depreciation and amortization	Depreciation and amortization	1.61		1.74		1.62		1.74		Depreciation and amortization	1.65		1.68
Operating (loss) income		(0.84)		0.81		1.37		1.02
Operating income										Operating income	2.92		2.14

Interest expense	Interest expense	(0.20)		(0.21)		(0.19)		(0.20)		Interest expense	(0.21)		(0.20)
Interest income	Interest income	0.19		0.19		0.18		0.18		Interest income	0.38		0.20
(Loss) income before income taxes		(0.85)		0.79		1.36		1.00
Income before income taxes										Income before income taxes	3.09		2.14
Income taxes	Income taxes	(0.22)		0.25		0.43		0.30		Income taxes	0.96		0.66
Net (loss) income		(0.63)	%	0.54	%	0.93	%	0.70	%
Net income										Net income	2.13	%	1.48	%

Sales. Sales were ~~$501,962~~$519,689 in the 13 weeks ended ~~April 30,~~October 29, 2022, an increase of ~~4.3%~~5.2% compared to the 13 weeks ended ~~April 24,~~October 30, 2021. Sales increased due to an increase in same store sales of ~~4.6% partially offset by~~4.3%, the ~~closure~~opening of a Gourmet Garage in the West Village in Manhattan, NY on April 29, 2022 and increased sales due to the remodel and conversion of the ~~Silver Spring, Maryland store in February 2021.~~Pelham, NY Fairway to the ShopRite banner on August 15, 2022. Same store sales increased due primarily to increased sales in New York City stores, inflation and continued growth in Supplemental Nutrition Assistance Program ("SNAP") benefit redemptions. Increases in transaction counts were partially offset by decreased basket sizes and same store digital sales were flat.

Sales were $1,533,581 in the 39 weeks ended April 30, 2022, an increase of 2.6% compared to the 39 weeks ended April 24, 2021. Sales increased due to an increase in same store sales of 3.7% partially offset by the closure of the Silver Spring, Maryland store in February 2021. Same store sales increased due primarily to increased sales in New York City stores, inflation and continued growth in SNAP benefit redemptions. Increases in transaction counts were partially offset by decreased basket sizes and same store digital sales were flat.

On a two-year stacked basis, same store sales decreased 1.6% and increased 6.0% in the 13 and 39 weeks ended April 30, 2022, respectively. Same store digital sales increased 106% and 135% on a two-year stacked basis for the 13 and 39 weeks ended April 30, 2022, respectively.

retail price inflation. New stores, ~~and~~ replacement stores and stores with banner changes are included in same store sales in the quarter after the store has been in operation for four full quarters. Store renovations and expansions are included in same store sales immediately.

Gross Profit. Gross profit as a percentage of sales increased ~~.48%~~.37% in the 13 weeks ended ~~April 30,~~October 29, 2022 compared to the 13 weeks ended ~~April 24,~~October 30, 2021 due primarily to increased departmental gross margin percentages ~~(.70%~~(.17%), decreased warehouse assessment charges from Wakefern (.21%)~~, and~~ due primarily to sales leverage, a favorable change in product mix ~~(.05%~~(.07%) and lower promotional spending (.06%), partially offset by higher LIFO charges ~~(.18%~~(.05%), and decreased patronage dividends and rebates received from Wakefern ~~(.16%) and higher promotional spending (.14%~~(.10%). ~~Department gross margins increased due primarily to pricing initiatives and improvements in commissary operations.~~

Gross profit as a percentage of sales increased .47% in the 39 weeks ended April 30, 2022 compared to the 39 weeks ended April 24, 2021 due primarily to increased departmental gross margin percentages (.71%) and a favorable change in product mix (.09%), partially offset by higher LIFO charges (.09%), increased warehouse assessment charges from Wakefern (.05%), decreased patronage dividends and rebates received from Wakefern (.13%) and higher promotional spending (.05%). Department gross margins increased due primarily to pricing initiatives and improvements in commissary operations.

Operating and Administrative Expense. Operating and administrative expense as a percentage of sales ~~increased 2.26%~~decreased .38% in the 13 weeks ended ~~April 30,~~October 29, 2022 compared to the 13 weeks ended ~~April 24, 2021. The 13 weeks ended April~~October 30, 2022 includes a $12.3 million (2.45% as a percentage of sales) settlement charge as a result of the termination of the Village Super Market, Inc. Employees’ Retirement Plan. The Company contributed cash of $1.5 million to fully fund the plan and the

~~remaining $10.8 million represents non-cash charges for unrecognized losses within accumulated other comprehensive loss as of the termination date.~~

~~Adjusted operating and administrative expense as a percentage of sales decreased .28%~~2021 due primarily to lower labor costs and fringe benefits ~~(.29%~~(.21%) and ~~less advertising~~decreased supply spending ~~(.09%), partially offset by increased external fees and transportation costs associated with digital sales (.12%~~(.15%). Labor costs and fringe benefits decreased due primarily to ongoing productivity initiatives ~~labor shortages~~ and sales leverage partially offset by minimum wage and ~~demand driven~~market-driven pay rate increases.

Operating and administrative expense as a percentage of sales increased .24% in the 39 weeks ended April 30, 2022 compared to the 39 weeks ended April 24, 2021. Adjusted operating and administrative expense as a percentage of sales decreased .58% due primarily to lower labor costs and fringe benefits (.61%) and less advertising spending (.11%), partially offset by increased external fees and transportation costs associated with digital sales (.11%). Labor costs decreased due to productivity initiatives, labor shortages and sales leverage partially offset by minimum wage and demand driven pay rate increases.

Depreciation and Amortization. Depreciation and amortization expense ~~decreased~~increased in ~~both~~ the 13 ~~and 39~~ weeks ended ~~April 30,~~October 29, 2022 compared to the 13 ~~and 39~~ weeks ended ~~April 24,~~October 30, 2021 due primarily to ~~the closure of the Silver Spring, Maryland ShopRite in February 2021 and the timing of~~ capital expenditures.

Interest Expense. Interest expense ~~decreased~~increased in ~~both~~ the 13 ~~and 39~~ weeks ended ~~April 30,~~October 29, 2022 compared to the 13 ~~and 39~~ weeks ended ~~April 24,~~October 30, 2021 due primarily to ~~lower average outstanding borrowings.~~interest related to the $10,000 unsecured term loan executed on September 1, 2022.

Interest Income. Interest income increased in ~~both~~ the 13 ~~and 39~~ weeks ended ~~April 30,~~October 29, 2022 compared to the 13 ~~and 39~~ weeks ended ~~April 24,~~October 30, 2021 due primarily to higher interest rates and larger amounts invested in variable rate notes receivable from Wakefern and demand deposits ~~invested~~ at Wakefern.

Income Taxes. The effective income tax rate was ~~25.4%~~31.0% in the 13 weeks ended ~~April 30,~~October 29, 2022 compared to ~~31.5%~~30.7% in the 13 weeks ended ~~April 24, 2021. The 13 weeks ended April~~October 30, 2022 includes the recognition of a discrete tax benefit related to the pension termination settlement charge recognized in the quarter. Excluding the impact of the pension termination settlement charge and related discrete tax benefit, the effective income tax rate was 33.7% in the 13 weeks ended April 30, 2022. The increase in the effective income tax rate is due primarily to greater apportionment in higher state tax rate jurisdictions and unfavorable return to provision adjustments in the 13 weeks ended April 30, 2022 as a result of receiving less work opportunity tax credits than estimated.

~~The effective income tax rate was 31.7% in the 39 weeks ended April 30, 2022 compared to 30.3% in the 39 weeks ended April 24,~~ 2021. The increase in the effective income tax rate is due primarily to greater apportionment in higher state tax rate ~~jurisdictions and unfavorable return to provision adjustments as a result of receiving less work opportunity tax credits than estimated.~~jurisdictions.

Net ~~(Loss)~~ Income. Net ~~loss~~Income was ~~$3,231~~$11,081 in the 13 weeks ended ~~April 30,~~October 29, 2022 compared to net income of ~~$2,574~~$7,328 in the 13 weeks ended ~~April 24,~~October 30, 2021. ~~Adjusted net income was $5,285 in the 13 weeks ended April 30, 2022 compared to $2,297 in the 13 weeks ended April 24, 2021. Adjusted net~~Net income increased ~~130%~~51% due primarily to the ~~4.6%~~4.3% increase in same store sales, higher gross profit margins and lower ~~payroll costs.~~

Net income was $14,227 in the 39 weeks ended April 30, 2022 compared to $10,490 in the 39 weeks ended April 24, 2021. Adjusted net income was $22,743 in the 39 weeks ended April 30, 2022 compared to $10,213 in the 39 weeks ended April 24, 2021. Adjusted net income increased 123% due primarily to the 3.7% increase in same store sales, higher gross profit marginsoperating and ~~lower payroll costs.~~

administrative expenses.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those accounting policies that management believes are important to the portrayal of the Company’s financial condition and results of operations. These policies require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company’s critical accounting policies relating to the impairment of long-lived assets, goodwill and indefinite-lived intangible assets, 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 ~~31, 2021.~~30, 2022. As of ~~April 30,~~October 29, 2022, there have been no 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.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was ~~$51,702~~$22,019 in the 3913 weeks ended ~~April 30,~~October 29, 2022 compared to ~~$32,995~~$7,887 in the corresponding period of the prior year. The change in cash flows from operating activities in fiscal ~~2022~~2023 was primarily due to changes in working capital and higher net income adjusted for non-cash items. Working capital changes, including Other assets and liabilities, increased cash flows from operating activities by ~~$1,279~~$756 in fiscal ~~2022~~2023 compared to a decrease of ~~$3,820~~$8,281 in fiscal ~~2021.~~2022. The change in impact of working capital is due primarily to ~~an increase in~~the timing of tax payments, accounts payable ~~to Wakefern~~ and ~~partially offset by a decrease in income taxes payable and an increase in merchandise inventories due primarily to cost inflation.~~accrued expenses.

During the 3913 weeks ended ~~April 30,~~October 29, 2022, Village used cash to fund capital expenditures of ~~$36,834,~~$9,813, dividends of ~~$9,787,~~$3,252, principal payments of long-term debt of ~~$6,174,~~$2,352, an investment in a real estate partnership for the development of a retail center in Old Bridge, New Jersey of ~~$4,393~~$1,276 and additional net investments of ~~$1,788~~$30,917 in notes receivable from Wakefern. Capital expenditures primarily include costs associated with the ~~purchase~~remodel and conversion of the ~~Galloway~~Pelham, NY Fairway to the ShopRite banner, the new Gourmet Garage store ~~shopping center,~~in the ~~purchase~~West Village of ~~land in central~~ New ~~Jersey for a potential replacement store and other development,~~York City, continued expansion of self-checkout, and various merchandising, technology, equipment and facility upgrades.

We expect capital expenditures to approximate ~~$55,000~~$70,000 in fiscal ~~2022.~~2023. Planned expenditures include ~~store~~costs for construction of three replacement stores scheduled to open in fiscal 2024, two major remodels, including the ~~purchase~~conversion of the ~~Galloway~~Pelham, NY store ~~shopping center,~~from the Fairway to the ShopRite banner, the purchase of the Vineland store shopping center, ~~the purchase~~several smaller store remodels and merchandising initiatives, installation of ~~land~~electronic shelf labels in ~~central New Jersey for a potential replacement store and other development, the construction of a new Gourmet Garage in the West Village in Manhattan,~~six stores, continued expansion of self-checkout, and various ~~merchandising,~~ technology, equipment and facility upgrades. The Company’s primary sources of liquidity in fiscal 2023 are expected to be cash and cash equivalents on hand at October 29, 2022 and operating cash flow generated in fiscal 2023.

On April 28, 2022 the Company entered into a partnership agreement for 30% interest in the development of a retail center in Old Bridge, New Jersey, which includes a Village replacement store with future lease obligations of ~~$9,280.~~$18,948. Village will fund its share of project costs estimated to be $15,000 to $20,000 over the two to three year life of the project. As of ~~April 30,~~October 29, 2022, Village has invested ~~$4,393~~$6,286 into the real estate partnership, which is accounted for as an equity method investment included in ~~Other assets~~Investments in Real Estate Partnerships on the Consolidated Balance Sheet.

On August 15, 2022, notes receivable due from Wakefern of $28,850 that earned interest at the prime rate plus 1.25% matured. The Company invested all of the proceeds received in variable rate notes receivable from Wakefern that earn interest at the prime rate plus .50% and mature on August 15, 2027. On September 28, 2022, the Company invested an additional $30,000 in variable rate notes receivable from Wakefern that earn interest at the prime rate plus .50% and mature on September 28, 2027. At ~~April 30,~~October 29, 2022, the Company held variable rate notes receivable due from Wakefern of ~~$28,262 that earn interest at the prime rate plus 1.25% and mature on August 15, 2022 and $28,821~~$29,606 that earn interest at the prime rate plus .75% and mature on February 15, ~~2024.~~2024, $29,078 that earn interest at the prime rate plus .50% and mature on August 15, 2027 and $30,017 that earn interest at the prime rate plus .50% and mature on September 28, 2027. 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.

Working capital was ~~$72,340~~$31,059 at ~~April 30,~~October 29, 2022 compared to ~~$44,023~~$79,796 at July ~~31, 2021.~~30, 2022. Working capital ratios at the same dates were ~~1.47~~1.18 and ~~1.29~~1.50 to one, respectively. The ~~increase~~decrease in working capital in fiscal ~~2022~~2023 compared to fiscal ~~2021~~2022 is due primarily to ~~$28,262~~$28,850 in notes receivable from Wakefern that ~~have been reclassified to current assets as they mature~~matured on August 15, ~~2022.~~2022 and were reinvested in long-term

notes receivable from Wakefern and an additional $30,017 investment 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.

Credit Facility

~~On January 28, 2022, the~~The Company ~~entered into an amended and restated credit agreement of the Company’s~~has a $150,500 credit facility (the “Credit Facility”) with Wells Fargo National Bank, National Association (“Wells Fargo”). The ~~notable changes from the previous agreement include: (1) Modification~~principal purpose of the reference rate from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") as a result of the expected cessation of LIBOR, (2) The execution of a fifteen-year $7,350 secured term loanCredit Facility is to finance general corporate and working capital requirements, Village’s acquisition of certain Fairway assets, the ~~acquisition~~purchase of the Galloway store shopping center and ~~(3) Modification of the definition of Total Adjusted Debt for the purpose of determining the maximum adjusted debt to EBITDAR ratio financial covenant.~~certain capital expenditure projects. Among other things, the Credit Facility provides for:

•An unsecured $25,500 term loan issued on May 12, 2020, repayable in equal monthly installments based on a seven-year amortization schedule through May 4, 2027 and bearing interest at the applicable SOFR plus 1.46%. ~~Prior to the January 28, 2022 amendment to the credit facility, interest accrued on the unsecured term loan at the applicable LIBOR plus 1.35%.~~ An interest rate swap with notional amounts equal to the term loan ~~fixed the base LIBOR at .41%, resulting in a fixed effective rate of 1.76%. In February 2022, the Company executed an amendment and restatement of the interest rate swap that~~ fixes the base SOFR at .26% per annum through May 4, 2027, resulting in a fixed effective interest rate of 1.72% on the term loan.

•A secured $50,000 term loan issued on September 1, 2020 repayable in equal monthly installments based on a fifteen-year amortization schedule through September 1, 2035 and bearing interest at the applicable SOFR plus 1.61%. ~~Prior to the January 28, 2022 amendment to the credit facility, interest accrued on the secured term loan at the applicable LIBOR plus 1.50%.~~ An interest rate swap with notional amounts equal to the term loan ~~fixed the base LIBOR at .69%, resulting in a fixed effective rate of 2.19%. In February 2022, the Company executed an amendment and restatement of the interest rate swap related to the term loan that~~ fixes the base SOFR at .57% per annum through September 1, 2035, resulting in a fixed effective interest rate of 2.18% on the term loan. The term loan is secured by real properties of Village Super Market, Inc. and its subsidiaries, including the sites of three Village stores.

•A secured $7,350 term loan issued on January 28, 2022 repayable in equal monthly installments based on a fifteen-year amortization schedule through January 28, 2037 and bearing interest at the applicable SOFR plus 1.50%. ~~Additionally, Village executed an~~An interest rate swap ~~for a~~with notional ~~amount~~amounts equal to the term loan ~~amount that~~ fixes the base SOFR at 1.41% per annum through January 28, 2037, resulting in a fixed effective interest rate of 2.91% on the term loan. The term loan is secured by the Galloway store shopping center acquired in the first quarter of fiscal 2022.

~~The principal purpose of~~On September 1, 2022, the Company amended the Credit Facility due to the execution of a seven year $10,000 unsecured term loan. The unsecured term loan is repayable in equal monthly installments based on a seven year amortization schedule through September 4, 2029 and bears interest at the applicable SOFR plus 1.35%. Village also executed an interest rate swap for a notional amount equal to ~~finance general corporate and working~~the term loan amount that fixes the base SOFR at 2.95%, resulting in a fixed effective rate of 4.30%. This loan qualified for an interest rate subsidy program with Wakefern on financing related to certain capital ~~requirements, Village’s acquisition of certain Fairway assets and the purchase~~expenditure projects. Net of the ~~Galloway store shopping center. The Credit Facility also provides for up to $25,000~~subsidy, the Company will pay interest at a fixed effective rate of letters of credit ($7,336 outstanding at April 30, 2022), which secure obligations for store leases and construction performance guarantees to municipalities. The Credit Facility contains covenants that, among other conditions, require a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum adjusted debt to EBITDAR ratio. The Company was in compliance with all covenants of the credit agreement at April 30, 2022.2.30%.

Based on current trends, the Company believes cash and cash equivalents on hand at ~~April 30,~~October 29, 2022, operating cash flow and availability under our Credit Facility are sufficient to meet our liquidity needs for the next twelve months and for the foreseeable future beyond the next twelve months.

There have been no other substantial changes as of ~~April 30,~~October 29, 2022 to the contractual obligations and commitments discussed in the Company’s Annual Report on Form 10-K for the year ended July ~~31, 2021.~~30, 2022.

OUTLOOK

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 statements. The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof.

•We expect the increase in same store sales to ~~increase~~range from ~~3.25% 4.25%~~1.0% to 3.0% in fiscal ~~2022.~~2023.

•We ~~expect~~have budgeted $70,000 for capital expenditures ~~to approximate $55,000~~ in fiscal ~~2022.~~2023. Planned expenditures include ~~store~~costs for construction of three replacement stores scheduled to open in fiscal 2024, two major remodels, including the ~~purchase~~conversion of the ~~Galloway~~Pelham, NY store ~~shopping center,~~from the Fairway to the ShopRite banner, the purchase of the Vineland store shopping center, ~~the purchase~~several smaller store remodels and merchandising initiatives, installation of ~~land~~electronic shelf labels in ~~central New Jersey for a potential replacement store and other development, the construction of a new Gourmet Garage in the West Village in Manhattan,~~six stores, continued expansion of self-checkout, and various ~~merchandising,~~ technology, equipment and facility upgrades.

•The Board’s current intention is to continue to pay quarterly dividends in ~~2022~~2023 at the most recent rate of $.25 per Class A and $.1625 per Class B share.

•We believe cash and cash equivalents on hand, operating cash flow and the Company's Credit Facility will be adequate to meet anticipated requirements for working capital, capital expenditures and debt payments for the foreseeable future.

•We expect our effective income tax rate in fiscal ~~2022~~2023 to be in the range of ~~30.5%~~31.0% - ~~31.5%~~32.0%.

•We expect approximately $12,900 of net periodic pension costs in fiscal 2022 related to the three Company sponsored defined benefit pension plans, including a $12,296 pre-tax settlement charge as a result of the termination of the Village Super Market, Inc. Employees’ Retirement Plan. The Company contributed cash of $1,485 to fully fund the plan and the remaining $10,811 represents non-cash charges for unrecognized losses within accumulated other comprehensive loss as of the termination date. Contributions to the remaining plans are expected to be immaterial in fiscal 2022.

Various uncertainties and other factors could cause actual results to differ from the forward-looking statements contained in this report. These include:

•The ~~Company operates~~COVID-19 pandemic created significant volatility and uncertainty in our business since the first outbreak in our trade area in March 2020. Its continuing impact and ~~around one~~the impact of new virus variants and the measures taken in response could adversely impact our business, financial condition and results of operations. We continue to monitor and adjust the safety measures we have implemented since the beginning of the ~~epicenters of~~pandemic. Our business may be affected by uncertain or changing economic and market conditions arising in connection with and in response to the COVID-19 ~~health crisis. 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,~~pandemic, including ~~the length and impact of stay-at-home orders and/or regional quarantines,~~ labor shortages, ~~and employment trends,~~inflation, disruptions to supply chains, higher operating and/or compliance costs, changes in customer trends and consumer demand, changes in federal, state and local laws, regulations and community response measures, the form and impact of economic stimulus, our customers access to and the continued availability of government benefit programs through the Supplemental Nutrition Assistance Program ("SNAP") and general overall economic ~~instability,~~instability. It is ~~uncertain at this time~~unclear whether and ~~could have a material adverse effect~~to what extent sales, consumer behavior, general economic and business activity will return to pre-pandemic levels and its impact on our ~~business, results of operations, financial condition and cash flows.~~business. 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~~in Manhattan due primarily to less 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, New York, Pennsylvania and Maryland. We are vulnerable to economic downturns in 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, workers' compensation, 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.

•Approximately ~~89%~~88% of our employees are covered by collective bargaining agreements. Any work stoppages could have an adverse impact on our financial results. If we are unable to control health care and pension costs provided for in the collective bargaining agreements, we may experience increased operating costs.

•The Company could be adversely affected if consumers lose confidence in the safety and quality of the food supply chain. The real or perceived sale of contaminated food products by us could result in a loss of consumer confidence and product liability claims, which could have a material adverse effect on our sales and 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.

•Our long-lived assets, primarily store property, equipment and fixtures, are subject to periodic testing for impairment. Failure of our asset groups to achieve sufficient levels of cash flow could result in impairment charges on long-lived assets.

•Our goodwill and indefinite-lived intangible assets are tested at the end of each fiscal year, or more frequently if circumstances dictate, for impairment. Failure of acquired businesses to achieve their forecasted expectations could result in impairment charges to goodwill and indefinite-lived intangible assets.

•Our effective tax rate may be impacted by the results of tax examinations and changes in tax laws.

•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 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.

2118

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.

2219

RELATED PARTY TRANSACTIONS

See note 5 to the unaudited consolidated financial statements for information on related party transactions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures at the end of the period. This evaluation was carried out under the supervision, and with the participation, of the Company’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer. Based upon that evaluation, the Company’s Chief Executive Officer, along with the Company’s Chief Financial Officer, concluded that the Company’s disclosure controls and procedures are effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~April 30,~~October 29, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

2320

PART II - OTHER INFORMATION

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

~~ITEM 2C.~~ ~~ISSUER PURCHASES OF EQUITY SECURITIES~~

~~The number and average price of shares purchased in each fiscal month of the third quarter of fiscal 2022 are set forth in the table below:~~

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 Plans or Programs (3)
January 30, 2022 to February 26, 2022 — $— — $3,202,713
February 27, 2022 to March 26, 2022 — $— — $3,202,713
March 27, 2022 to April 30, 2022 22,704 $24.70 — $3,202,713
Total 22,704 $24.70 — $3,202,713

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

~~(2) Includes shares purchased from the Village Super Market, Inc. Employees' Retirement Plan related to the termination and related liquidation of the plan's assets.~~

(3) Includes amount remaining under the $5.0 million repurchase program of the Company's Class A Common Stock authorized by the Board of Directors and announced on September 13, 2019 . 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~~ITEM 6.		~~Exhibits~~ EXHIBITS

Exhibit 31.1	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

2421

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Village Super Market, Inc.
			Registrant

Dated: ~~June 8,~~December 7, 2022			/s/ Robert P. Sumas
			Robert P. Sumas
			(Chief Executive Officer)

Dated: ~~June 8,~~December 7, 2022			/s/ John Van Orden
			John Van Orden
			(Chief Financial Officer)

2522


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 Plans or Programs (3)
January 30, 2022 to February 26, 2022	—	$—	—	$3,202,713
February 27, 2022 to March 26, 2022	—	$—	—	$3,202,713
March 27, 2022 to April 30, 2022	22,704	$24.70	—	$3,202,713
Total	22,704	$24.70	—	$3,202,713