May 11, 2007
Michael Moran, Esq.
Branch Chief Accountant
U.S. Securities and Exchange Commission
Division of Corporation Finance
Washington, DC 20549-0404
Re: Village Super Market, Inc.
Form 10-K for the year ended July 29, 2006
Filed October 23, 2006
File Number 0-2633
Dear Mr. Moran:
Thank you for your comment regarding the above referenced filing. We
appreciate your assistance in ensuring our filings comply with the applicable
disclosure requirements. The following sets forth the comment made in your
letter dated May 3, 2007 and our response thereto:
1. Comment: We reissue our prior comment to you in our letter dated
March 23, 2007. For your reference we have repeated the comment below.
Furthermore, please show us what your proposed disclosure will look like
with respect to this issue.
SFAS No. 128 has always required the use of the two-class method of
computing basic and diluted EPS for those companies with multiple classes
of common stock with differing dividend rates. We consider your Class B
common stock to be an additional class of common stock under paragraph
60.b. of SFAS 128. As such we would expect you to calculate basic and
diluted EPS using the two-class method in accordance with paragraph 61 of
SFAS 128. With respect to your belief that it is unreasonable to assume
a disproportionate allocation of undistributed earnings due to the control
of the Board of Directors by the Class B stockholders, it is our
understanding that the Class A shares are entitled to dividends 54% greater
than that paid on the Class B shares. In this regard, it would appear
appropriate to use the contractually established ratio in determining the
allocation of undistributed earnings to the individual classes of common
stock in applying the two-class method. Please revise your financial
statements to present both basic and diluted earnings per share for each
class of common stock consistent with the requirement of paragraph 61(d)
of SFAS No. 128.
Response: The Company agrees with the Staff's position and will compute
both basic and diluted earnings per share for each class of common stock
utilizing the two-class method prospectively in our consolidated financial
statements beginning in our Quarterly Report on Form 10-Q for the period
ended April 28, 2007. The contractually established dividend ratio will
be utilized to determine the allocation of undistributed earnings to the
individual classes of common stock in applying the two-class method.
The net income per share section of the Company's Consolidated Statements
of Operations will be presented as follows (with the prior year periods
labeled revised):
13 Wks. Ended 13 Wks. Ended 39 Wks. Ended 39 Wks. Ended
Apr. 28, 2007 Apr. 29, 2006 Apr. 28, 2007 Apr. 29, 2006
(Revised) (Revised)
Net income per share:
Class A common stock:
Basic $ $ $ $
Diluted $ $ $ $
Class B common stock:
Basic $ $ $ $
Diluted $ $ $ $
The notes to the consolidated financial statements will include the
following disclosure:
The Company has two classes of common stock. Class A common stock is
entitled to one vote per share and to cash dividends as declared 54%
greater than those paid on Class B common stock. Class B common stock is
entitled to 10 votes per share. Class A and Class B common stock share
equally on a per share basis in any distributions in liquidation. Shares
of Class B common stock are convertible on a share for share basis for
Class A common stock at any time. Class B common stock is not
transferable except to another holder of Class B common stock or by will
or under the laws of intestacy or pursuant to a resolution of the Board of
Directors of the Company approving the transfer. As a result of this
voting structure, the holders of the Class B common stock control greater
than 50% of the total voting power of the stockholders of the Company and
control the election of the Board of Directors.
During 2007, the staff of the Division of Corporation Finance of the
SEC reviewed the Company's Annual Report on Form 10-K for the fiscal year
ended July 29, 2006. The Company considered this review and determined
that the two-class method of computing and presenting net income per share
was appropriate in accordance with FASB Statement No. 128, "Earnings Per
Share," and EITF Issue No. 03-6, "Participating Securities and the
Two-Class Method under FASB Statement No. 128". Net income per share for
prior periods has been revised to reflect this change. 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, our Class A common stock is
assumed to receive a 54% greater participation in undistributed earnings
than our Class B common stock, in accordance with the classes' respective
dividend rights.
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 shares of Class A common stock on a
share-for-share basis, as this method is more dilutive than the two-class
method.
The tables below reconcile the numerators and denominators of basic
and diluted net income per share for all periods presented.
13 Weeks Ended 39 Weeks Ended
April 28, 2007 April 28, 2007
Class A Class B Class A Class B
------- ------- ------- -------
Numerator:
Net income allocated, basic $ $ $ $
Conversion of Class B to Class A shares
Effect of share-based compensation
on allocated net income ----- ----- ----- -----
Net income allocated, diluted $ ===== $ ===== $ ===== $ =====
Denominator:
Weighted average shares
outstanding, basic
Conversion of Class B to Class A shares
Dilutive effect of share-based
compensation ----- ----- ----- -----
Weighted average shares
outstanding, diluted ===== ===== ===== =====
13 Weeks Ended 39 Weeks Ended
April 29, 2006 (Revised) April 29, 2006 (Revised)
Class A Class B Class A Class B
------- ------- ------- -------
Numerator:
Net income allocated, basic $ $ $ $
Conversion of Class B to Class A shares
Effect of share-based compensation
on allocated net income ----- ----- ----- -----
Net income allocated, diluted $===== $===== $===== $=====
Denominator:
Weighted average shares
outstanding, basic
Conversion of Class B to Class A share
Dilutive effect of share-based
compensation ----- ----- ----- -----
Weighted average shares
outstanding, diluted $===== $===== $===== $=====
Net income per share for the prior year periods on a
revised basis is as follows:
13 Weeks Ended 39 Weeks Ended
April 29, 2006 April 29, 2006
Class A Class B Class A Class B
------- ------- ------- -------
Net income per share - as revised:
Basic $ $ $ $
Diluted $ $ $ $
In previous periods, the Company utilized the if-converted method of
calculating both basic and diluted net income per share, as that method
resulted in greater dilution than the two-class method. Net income per
share for the prior year periods as previously reported was as follows:
13 Weeks Ended 39 Weeks Ended
April 29, 2006 April 29, 2006
-------------- --------------
Net income per share - as previously reported:
Basic $ $
Diluted $ $
The Company acknowledges that:
- The Company is responsible for the adequacy and accuracy of
the disclosure in the filing;
- Staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any
action with respect to the filing; and
- The Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
We appreciate your assistance in ensuring that the Company provides
appropriate disclosures in its public filings. Should you have any
questions about the above response, please feel free to contact the
undersigned at (973) 467-2200.
Very truly yours,
VILLAGE SUPER MARKET, INC.
Kevin R. Begley
Chief Financial Officer
KRB/sw