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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 [Fee Required]. For the fiscal year ended July 30, 1994.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 [Fee Required] for the transition period from ______
to ___________.
Commission file Number 0-2633
VILLAGE SUPER MARKET, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1576170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
733 Mountain Avenue, Springfield, New Jersey 07081
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201)-467-2200
Securities registered pursuant of Section 12 (b) of the Act:
Title of Each Class Name of Each Exchange on Which
Registered
None None
Securities registered pursuant to Section 12(g) of the Act:
CLASS A COMMON STOCK, NO PAR VALUE
(Title of Class)
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 X No___.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]
The aggregate market value of the Class A common stock of Village Super
Market, Inc. held by non-affiliates was approximately $8,129,296, and the
aggregate market value of the Class B common stock held by non-affiliates
was approximately $1,200,376 (based upon the closing price of the Class A
shares on the Over the Counter Market on October 11, 1994).
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of latest practicable date.
Outstanding at
Class October 24, 1994
Class A common stock, no par value 1,315,800 Shares
Class B common stock, no par value 1,594,076 Shares
DOCUMENTS INCORPORATED BY REFERENCE
Information contained in the 1994 Annual Report to Shareholders and the 1994
definitive Proxy Statement to be filed with the Commission and delivered to
security holders in connection with the Annual Meeting scheduled to be held on
December 9,1994 are incorporated by reference into this Form 10-K at Part II,
Items 5, 6, 7 and 8 and Part III.
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Part I
ITEM I. BUSINESS
GENERAL
The Company operates a chain of 21 ShopRite supermarkets, 15 of which
are located in northern New Jersey, 1 of which is in northeastern
Pennsylvania and 5 of which are in the southern shore area of New
Jersey.
In addition, the Company operates two former ShopRite stores under a
"Village Market" format as described below. The Company's membership in
Wakefern Food Corporation ("Wakefern"), the nation's largest retailer
owned food cooperative and owner of the ShopRite name, provides the
Company many of the economies of scale in purchasing, distribution and
advertising associated with chains of greater size and geographic reach.
The Company believes that the regional nature of its business and the
continuity of its management under the leadership of its founding family
have permitted the Company to operate with greater flexibility and
responsiveness to the demographic characteristics of the communities
served by its stores.
The Company seeks to generate high sales volume by offering a wide
variety of high quality products at consistently low prices. The
Company attempts to efficiently utilize its selling space, gives
continuing attention to the decor and format of its stores and tailors
each store's product mix to the preferences of the local community. The
Company concentrates on development of superstores, which, in addition
to their larger size (an average of 50,000 total square feet, including
office and storage space, compared with an average of 30,000 total
square feet for conventional supermarkets), feature such higher margin
specialty service departments as an on-site bakery, an expanded
delicatessen, a fresh seafood section and, in most cases, a prescription
pharmacy. Superstores also offer an expanded selection of higher margin
non-food items such as cut flowers, health and beauty aids, greeting
cards, videocassette rentals and small appliances. The two most recent
superstores also include a warehouse section featuring products in giant
sizes. The following table shows the percentage of the Company's sales
allocable to various product categories during each of the periods
indicated as well as the number of the Company's superstores and
percentage of selling square feet allocable to these stores during each
of these periods:
Product Categories Fiscal Year Ended In July
1992 1993 1994
Groceries 44.4% 44.2% 44.0%
Dairy and Frozen 15.5 15.8 15.7
Meats 11.2 11.1 11.1
Non-Foods 9.4 9.2 9.2
Produce 9.1 9.4 9.3
Delicatessen 4.5 4.1 4.1
Seafood 1.9 2.0 1.9
Pharmacy 2.3 2.5 2.8
Bakery 1.4 1.6 1.6
Other .3 .1 .3
100.0% 100.0% 100.0%
Number of superstores 20 19 18
Selling square feet
represented by superstores 80% 82% 82%
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Because of its increased size and broader product mix, a superstore
can satisfy a greater percentage of a customer's weekly shopping needs
and, as a result, the typical superstore generally has a higher volume
of sales per square foot and sales per customer than a conventional
supermarket. In addition, because of their greater total sales volume
and increased percentage of their sales allocable to higher margin
items, superstores generally operate more profitably than conventional
supermarkets.
A variety of factors affect the profitability of each of the
Company's stores including local competitors, size, access and parking,
lease terms, management supervision, and the strength of the ShopRite
trademark in the local community. The Company continually evaluates
individual stores to decide whether they should be closed. Accordingly,
the Orange, Maplewood, Kingston, Morristown and Easton stores have been
sold since December 1991. In addition, two stores were converted to a
"Village Market" format designed to reduce costs and increase margins in
lower volume locations.
The Company operates a separate liquor store adjacent to one Company
supermarket.
DEVELOPMENT AND EXPANSION
The Company is engaged in a continuing program to upgrade and expand
its supermarket chain. This program has included major store
remodelings as well as the opening or acquisition of additional stores.
When remodeling, the Company has sought, whenever possible, to increase
the amount of selling space in its stores and, where feasible within
existing site limitations, to convert conventional supermarkets to
superstores. The Company completed one major expansion and remodel in
fiscal 1994 and two smaller expansions. The Company has budgeted
$8,000,000 for capital expenditures in fiscal 1995. The major planned
expenditures are the expansion and remodel of the Chester store and the
beginning of the expansion of the Absecon store.
In the last five years, the Company has added one new store and
completed five remodels. The Company's goal has been to open an average
of one new superstore and conduct a major remodel of one store each
year. However, because of delays associated with increased governmental
regulations, including sewage moratoriums and environmental cleanup
regulations effecting sites and the lack of recent activity by real
estate developers, the Company has been unable to open the desired
number of new stores. Additional store remodelings and sites for new
stores are in various stages of development. The Company will also
consider additional acquisitions should appropriate opportunities arise.
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WAKEFERN
The Company is the second largest member of Wakefern (owning 17.2% of
Wakefern's outstanding stock) and two of the Company's principal
shareholders were founders of Wakefern. Wakefern, which was organized
in 1946, is the nation's largest retailer-owned food cooperative. There
are presently 30 individual member companies and 180 supermarkets which
comprise the Wakefern cooperative. Only Wakefern and member companies
are entitled to use the ShopRite name and trademark, purchase their
product requirements and participate in ShopRite advertising and
promotional programs and its computerized purchasing, warehousing and
distribution services.
The principal benefits to the Company from its relationship with
Wakefern are the use of the ShopRite name and trademark, volume
purchasing, ShopRite private label products, distribution and
warehousing on a cooperative basis, and ShopRite advertising and
promotional programs. The Company believes that the ShopRite name is
widely recognized by its customers and is a factor in those customers'
decisions about where to shop. In addition, Wakefern can purchase large
quantities and varieties of products at favorable prices which it can
then pass on to its members. These benefits are important to the
Company's success.
Wakefern distributes as a "patronage dividend" to each of its
stockholders a share of the earnings of Wakefern in proportion to the
dollar volume of business done by the stockholder with Wakefern during
each fiscal year.
While Wakefern has a substantial professional staff, it operates as a
member cooperative. Executives of most members make contributions of
time to the business of Wakefern. Senior executives of the Company
spend a significant amount of their time working on various Wakefern
committees which oversee and direct Wakefern purchases and other
programs.
Most of the Company's advertising is developed and placed by
Wakefern's professional advertising staff. Wakefern is responsible for
all television, radio and major newspaper advertisements. Wakefern
bills its members by various formulas which distribute advertising costs
in accordance with the estimated proportional benefits to each member
from such advertising. The Company also places Wakefern developed
materials with local newspapers.
Wakefern operates warehouses and distribution facilities in
Elizabeth, New Jersey; Dayton, New Jersey; Wallkill, New York; and South
Brunswick, New Jersey. Each member is obligated to purchase from
Wakefern a minimum of 85% of its requirements for products offered by
Wakefern until ten years from the date that stockholders representing
75% of Wakefern sales notify Wakefern that those stockholders request
the Wakefern Stockholder Agreement be terminated. If this purchase
obligation is not met, the member is required to pay Wakefern's profit
contribution shortfall attributable to this failure. This agreement
also makes unapproved changes in control of the Company and sale of the
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Company or of individual Company stores, except to a qualified
successor, financially prohibitive by requiring the Company in such
cases to pay Wakefern the profit contribution shortfall attributable to
the sale of store or change in control. Such payments were waived by
Wakefern in connection with the sale of the Orange, Maplewood, Kingston
and Morristown stores. A "qualified successor" must be or agree to
become a member of Wakefern and may not own or operate any supermarkets
other than ShopRite supermarkets, in the states of New York, New Jersey,
Pennsylvania, Delaware, Maryland, Virginia, Connecticut, Massachusetts,
Rhode Island, Vermont, New Hampshire, Maine or the District of Columbia
or own or operate more than 25 non-ShopRite supermarkets in any other
locations in the United States.
Wakefern, under circumstances specified in its bylaws, may refuse to
sell merchandise to, and may repurchase the Wakefern stock of, any
member. Such circumstances include certain unapproved transfers by a
member of its supermarket business or its capital stock in Wakefern,
unapproved acquisition by a member of certain supermarket or grocery
wholesale supply businesses, the material breach by a member of any
provision of the bylaws of Wakefern or any agreement with Wakefern or a
determination by Wakefern that the continued supplying of merchandise or
services to such member would adversely affect Wakefern.
Any material change in Wakefern's method of operation or a
termination or material modification of the Company's relationship with
Wakefern following expiration of the above agreements or otherwise (none
of which are contemplated or considered likely) might have an adverse
impact on the conduct of the Company's business and could involve
additional expense for the Company. The failure of any Wakefern member
to fulfill its obligations under these agreements or a member's
insolvency or withdrawal from Wakefern could result in increased costs
to remaining members.
Wakefern owns and operates 23 supermarkets. The Company believes
that Wakefern may consider purchasing additional stores in the future
from non-members and from existing members who may desire to sell their
stores for financial, estate planning or other reasons. The Company
also understands that Wakefern may consider opening and operating new
ShopRite supermarkets as well.
Wakefern does not prescribe geographical franchise areas to its
members. The specific locations at which the Company, other members of
Wakefern or Wakefern itself may open new units under the ShopRite name
are, however, subject to the approval of Wakefern's Site Development
Committee. This committee is composed of persons who are not employees
or members of Wakefern and from whose decision to deny a site
application may be appealed to the Wakefern Board of Directors.
Wakefern assists its members in their site selection by providing
appropriate demographic data, volume projections and projections of the
impact of the proposed market on existing member supermarkets in the
area.
Each member's Wakefern stock (including the Company's) is pledged to
Wakefern to secure all of that member's obligations to Wakefern.
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Moreover, every owner of 5% or more of the voting stock of a member
(including six members of the Sumas family) must personally guarantee
prompt payment of all amounts due Wakefern from that member. Wakefern
does not own any securities of the Company or its subsidiaries.
Each of Wakefern's members is required to make capital contributions
to Wakefern based on the number of stores operated by that member (and
to a limited extent the sales volume generated by those stores). As
additional stores are opened or acquired by a member (including the
Company), additional capital must be contributed by it to Wakefern. On
occasion, as its business needs have required, Wakefern has increased
the per-store capital contributions required of its members. Wakefern
has in the past permitted these increases in required capital to be paid
in installments over a period of time. The Company is required to
invest approximately $1,065,000 over approximately the next four years.
TECHNOLOGY
The Company considers automation and computerization important to its
operations and competitive position. All stores have scanning checkout
systems that improve pricing accuracy, enhance productivity and reduce
checkout time for customers. Over the last three years, the company
installed IBM RS/6000 computers and satellite communications in each
store. Using the RS/6000 system, the Company offers customers debit and
credit card payment options in all stores. In addition, the Company is
utilizing a computer generated ordering system in ten stores, which is
designed to reduce inventory levels and out of stock conditions, enhance
shelf space utilization, and reduce labor costs.
The Company's commitment to advanced scanning systems has enabled it
to participate in Price Plus, ShopRite's preferred customer program.
Customers receive electronic discounts by presenting a scanable Price
Plus card. In addition, the Company began using Clip Less coupons in
1994. Customers need only present their Price Plus card to receive the
value of our in-ad coupons. Also, target marketing programs using this
technology are presently being developed. The Company is currently in
the process of converting our customers separate Price Plus and check
cashing cards to a single universal card. In addition to customer
convenience, the new card provides the Company with improved ability to
limit the acceptance of bad checks.
The Company utilizes a direct store delivery system, consisting of
personal computers and hand held scanners, for most items not purchased
through Wakefern in order to provide equivalent cost and retail price
control over these products. Six stores have implemented CAO (Computer
Assisted Ordering), which uses hand held terminals to read UPC codes on
shelf tags to re-order products. In addition, certain in-store
department records are computerized, including the records of all
pharmacy departments. In certain stores, meat, seafood and delicatessen
prices are maintained on computer for automatic weighing and pricing.
Furthermore, a substantial majority of the Company's stores have
computerized time and attendance and work scheduling systems and several
also have computerized energy management systems. The Company seeks to
design its stores to use energy efficiently, including recycling waste
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heat generated by refrigeration equipment for heating and other
purposes.
COMPETITION
The supermarket business is highly competitive. Industry profit
margins are narrow, consequently earnings are dependent on high sales
volume and operating efficiency. The Company is in direct competition
with national, regional and local chains as well as independent
supermarkets, warehouse clubs, drug stores, discount department stores
and convenience stores. The principal methods of competition utilized
by the Company are low pricing, courteous, quick service to the
customer, quality products and consistent availability of a wide variety
of merchandise including the ShopRite private label. The Company
believes its regional focus and the continuity of its management by the
Sumas family permit it to operate with greater flexibility in tailoring
the products offered in each store to the demographics of the
communities they serve as compared to national and larger regional
chains. The Company's principal competitors are Pathmark, A & P,
Foodtown, King's, Grand Union and Acme. Many of the Company's
competitors have financial resources substantially greater than those of
the Company.
LABOR
As of October 6, 1994, the Company employed approximately 3,800
persons, of whom approximately 2,300 worked part-time. Approximately
85% of the Company's employees are covered by collective bargaining
agreements. The Company was affected by a labor dispute with its
largest union in fiscal 1993 which was settled with a new four year
contract. A contract with one large union expires December 31, 1994.
Most of the Company's competitors in New Jersey are similarly unionized.
REGULATORY ENVIRONMENT
While the Company must secure a variety of health and food
distribution permits for the conduct of its business, it does not
believe that such regulation is material to its operations. The
Company's pharmacy departments are subject to state regulation and
licensed pharmacists must be on duty at all times. The Company's liquor
operation is also subject to regulation by state and municipal
administrative authorities. The Company does not presently anticipate
expanding its liquor operations. Compliance with statutes regulating
the discharge of materials into the environment is not expected to have
a material effect on capital expenditures, earnings and competitive
position in fiscal 1995 and 1996.
ITEM 2. PROPERTIES
The Company owns the sites of five of its supermarkets (containing
304,000 square feet of total space), all of which are free-standing
stores, except the Egg Harbor store, which is part of a shopping center.
The Company also owns the site of the former Easton and Maplewood
stores. The Maplewood property is leased to another operator and the
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Easton store is currently being marketed. The remaining eighteen
supermarkets (containing 792,000 square feet of total space) are leased,
with initial lease terms generally ranging from 20 to 30 years, usually
with renewal options. Eleven of these leased stores are located in
strip shopping centers and the remaining seven are free-standing stores.
Except with respect to one lease between the Company and certain related
parties, none of the Company's leases expire before 1997. The annual
rent, including capitalized leases, for all of the Company's leased
facilities for the year ended July 30, 1994 was approximately
$6,100,000. The Company is a limited partner in two partnerships, each
of which owns a shopping center in which one of the Company's leased
supermarkets is located. The Company also is a general partner in a
general partnership that is a lessor of one of the Company's free-
standing supermarkets.
ITEM 3. LEGAL PROCEEDINGS
No material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters submitted to shareholders in the fourth quarter.
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
In addition to the information regarding directors incorporated by
reference to the Company's definitive Proxy Statement in Part III, Item
10, the following is provided with respect to executive officers who are
not directors:
NAME AGE POSITION WITH THE COMPANY
Carol Lawton 51 Vice President and Assistant Secretary since
1983; responsible for administration of
headquarters staff.
Frank Sauro 36 General Counsel since April 1988.
Mr. Sauro is a member of the New Jersey
Bar.
Kevin Begley 36 Chief Financial Officer since December 1988.
Mr. Begley is a Certified Public Accountant.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
The information required by this Item is incorporated by reference
from Information appearing on Page 16 in the Company's Annual Report to
Shareholders for the fiscal year ended July 30, 1994.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference
from Information appearing on Page 3 in the Company's Annual Report to
Shareholders for the fiscal year ended July 30, 1994.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is incorporated by reference
from Information appearing on Pages 4 and 5 in the Company's Annual
Report to Shareholders for the fiscal year ended July 30, 1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference
from Information appearing on Page 3 and Pages 6 to 16 in the Company's
Annual Report to Shareholders for the fiscal year ended July 30, 1994.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 is incorporated by
reference from the Company's definitive Proxy Statement to be filed on
or before November 7, 1994, in connection with its Annual Meeting
scheduled to be held on December 9, 1994.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated by
reference from the Company's definitive Proxy Statement to be filed on
or before November 7, 1994, in connection with its Annual Meeting
scheduled to be held on December 9, 1994.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated by
reference from the Company's definitive Proxy Statement to be filed on
or before November 7, 1994, in connection with its annual meeting
scheduled to be held on December 9, 1994.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is incorporated by
reference from the Company's definitive Proxy Statement to be filed on
or before November 7, 1994, in connection with its annual meeting
scheduled to be held on December 9, 1994.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) 1. Financial Statements
Consolidated Balance Sheets - July 30, 1994 and July 31, 1993
Consolidated Statements of Operations - years ended
July 30, 1994; July 31, 1993 and July 25, 1992
Consolidated Statements of Shareholders' Equity - years ended
July 30, 1994; July 31, 1993 and July 25, 1992
Consolidated Statements of Cash Flows - years ended
July 30, 1994; July 31, 1993 and July 25, 1992
Notes to consolidated financial statements
The financial statements above and Independent Auditors' Report
have been incorporated by reference from the Company's Annual
Report to Shareholders for the fiscal year ended July 30, 1994.
PAGE
2. Financial Statement Schedules
Independent Auditors' Report on Schedules . . . . . . . 13
Schedule V - Property, Equipment and Fixtures. . . . . 14
Schedule VI - Accumulated depreciation and
amortization of property,
equipment and fixtures. . . . . . . . . . 15
All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.
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3. Exhibits
EXHIBIT INDEX
Exhibit No. 3 - Certificate of Incorporation and By-Laws *
Exhibit No. 4 - Instruments defining the rights of security
holders;
4.1 Note Purchase Agreement dated August 20, 1987 *
4.2 Loan Agreement dated March 29, 1994*
4.3 Amendment No. 1 to Loan Agreement
Exhibit No. 10 - Material Contracts:
10.1 Wakefern By-Laws *
10.2 Stockholders Agreement dated February 20, 1992
between the Company and Wakefern Food Corp. *
10.3 Voting Agreement dated March 4, 1987 *
10.4 1987 Incentive and Nonstatutory Stock Option Plan *
Exhibit No. 13 - Annual Report to Security Holders
Exhibit No. 28 a - Press release dated October 6, 1994
Exhibit No. 28 b - Third Quarter Report to Shareholders
Exhibit No. 22 - Subsidiaries of Registrant
Exhibit No. 23 - Consent of KPMG Peat Marwick LLP
* The following exhibits are incorporated by reference from the following
previous filings:
Form 10-K for 1993: 3, 4.1, 10.1, 10.2, 10.3 and 10.4
Form 10-Q for April 23, 1994: 4.2
(b) No reports on Form 8-K were filed during the fourth quarter
of fiscal 1994.
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Independent Auditor's Report on
Financial Statement Schedules
The Board of Directors
Village Super Market, Inc.:
Under date of September 30, 1994, except as to note 5, which is as of
October 21, 1994, we reported on the consolidated balance sheets of
Village Super Market, Inc. as of July 30, 1994 and July 31, 1993, and the
related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the three-year period ended July 30,
1994 as contained in the 1994 annual report to shareholders. These
consolidated financial statements and our report thereon are incorporated
by reference in the annual report on Form 10-K for the year 1994. In
connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related financial statement schedules
as listed in the accompanying index. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statement schedules based on our
audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
Short Hills, New Jersey
September 30, 1994, except as
to note 5, which is as of
October 21, 1994
<PAGE 14>
VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, EQUIPMENT AND FIXTURES
Col. A Col. B Col. C Col. D Col. E
Balance at Balance
Beginning Additions at end
Classification of Period at Cost Retirements of Period
Fifty-two weeks ended
July 30, 1994
Land $ 7,928,028 $ 100,000 $ -- $ 8,028,028
Buildings 34,000,548 337,075 -- 34,337,623
Store Fixtures &
equipment 55,024,926 2,978,566 1,107,894 56,895,598
Leasehold improvement 11,246,225 1,956,927 17,447 13,185,705
Leased property
under capital lease 15,182,532 -- 1,481,933 13,700,599
Vehicles 883,644 101,910 133,458 852,096
Construction in
progress 231,160 499,336 -- 730,496
$124,497,063 $5,973,814 $2,740,732 $127,730,145
Fifty-three weeks ended
July 31, 1993
Land $ 7,878,028 $ 50,000 $ -- $ 7,928,028
Buildings 33,899,911 100,637 -- 34,000,548
Store fixtures &
equipment 56,248,734 1,323,522 2,547,330 55,024,926
Leasehold improvements 11,355,257 146,436 255,468 11,246,225
Leased property
under capital leases 15,182,532 -- -- 15,182,532
Vehicles 905,669 125,003 147,028 883,644
Construction in
progress -- 231,160 -- 231,160
$125,470,131 $1,976,758 $2,949,826 $124,497,063
Fifty-two weeks ended
July 25, 1992
Land $ 3,897,025 $3,981,003 $ -- $ 7,878,028
Buildings 25,157,367 8,837,299 94,755 33,899,911
Store Fixtures &
equipment 54,734,365 6,116,977 4,602,608 56,248,734
Leasehold improvements 11,290,555 643,899 579,197 11,355,257
Leased property
under capital lease 15,182,532 -- -- 15,182,532
Vehicles 920,169 116,212 130,712 905,669
Construction in
progress 5,201,003 5,201,003 -- --
$116,383,016$14,494,387 $ 5,407,272 $125,470,131
<PAGE 15>
VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, EQUIPMENT AND FIXTURES
Col. A Col. B Col. C Col. D Col. E
Balance at Balance
Beginning at end
Classification of Period Additions Retirements of Period
Fifty-two weeks ended
July 30, 1994
Buildings $ 5,733,858 $1,170,926 $ -- $ 6,904,784
Store fixtures &
equipment 30,136,690 5,354,389 970,264 34,520,815
Leasehold improvements 6,404,256 1,062,824 12,454 7,454,626
Leased property
under capital leases 7,419,259 544,758 1,185,542 6,778,475
Vehicles 672,133 116,041 130,647 657,527
$50,366,196 $8,248,938 $2,298,907 $56,316,227
Fifty-three weeks ended
July 31, 1993
Buildings $ 4,558,724 $1,175,134 $ -- $ 5,733,858
Store fixtures &
equipment 26,876,142 5,277,908 2,017,360 30,136,690
Leasehold improvements 5,682,811 975,136 253,691 6,404,256
Leased property
under capital leases 6,820,063 599,196 -- 7,419,259
Vehicles 658,907 153,866 140,640 672,133
$44,596,647 $8,181,240 $2,411,691 $50,366,196
Fifty-two weeks ended
July 25, 1992
Buildings $ 3,590,020 $1,058,059 $ 89,355 $ 4,558,724
Store fixtures &
equipment 25,967,780 5,362,514 4,454,152 26,876,142
Leasehold improvements 5,249,854 972,371 539,414 5,682,811
Leased property
under capital leases 6,216,743 603,320 -- 6,820,063
Vehicles 596,013 188,950 126,056 658,907
$41,620,410 $8,185,214 $5,208,977 $44,596,647
<PAGE 16>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
By: /S/ Kevin Begley By: /S/ Perry Sumas
Kevin Begley Perry Sumas
(Chief Financial & (Chief Executive Officer)
Principal Accounting Officer)
Date: October 27, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on dates indicated:
/S/ Nicholas Sumas /S/ John P. Sumas
Nicholas Sumas, October 27, 1994 John P. Sumas, October 27, 1994
(Director) (Director)
/S/ Perry Sumas /S/ James Sumas
Perry Sumas, October 27, 1994 James Sumas, October 27, 1994
(Director) (Director)
/S/ William Sumas /S/ Robert Sumas
William Sumas, October 27, 1994 Robert Sumas, October 27, 1994
(Director) (Director)
/S/ John J. McDermott /S/ George Andresakes
John McDermott, October 27, 1994 George Andresakes, October 27, 1994
(Director) (Director)
/S/ Norman Crystal
Norman Crystal, October 27, 1994
(Director)
<PAGE 17>
EXHIBIT NO. 22
SUBSIDIARIES OF REGISTRANT
The Company currently has one wholly-owned subsidiary, Village
Liquor, Inc. This corporation is organized under the laws of the State
of New Jersey. The Financial statements of this subsidiary are
included in the Company's consolidated financial statements.
<PAGE 18>
EXHIBIT NO. 23
Independent Auditors' Consent
The Board of Directors
Village Super Market, Inc.:
We consent to incorporation by reference in the Registration
Statement (No. 2-86320) on Form S-8 of Village Super Market, Inc. of
our reports dated September 30, 1994, except as to note 5, which is
as of October 21, 1994, relating to the consolidated balance sheets
of Village Super Market, Inc. and subsidiaries as of July 30, 1994
and July 31, 1993, and the related consolidated statements of
operations, shareholders' equity, and cash flows and related
schedules for each of the years in the three year period ended July
30, 1994, which reports appear in or are incorporated by reference in
the July 30, 1994 annual report on Form 10-K of Village Super Market,
Inc.
KPMG Peat Marwick LLP
Short Hills, New Jersey
October 27, 1994
<PAGE 19>
EXHIBIT NO. 28A
Village Super Market, Inc., Reports Results
For the Fourth Quarter and Year Ended July 30, 1994
Springfield, NJ - October 6, 1994 - Village Super Market, Inc. reported sales
and a net loss for the fourth quarter ended July 30, 1994, Perry Sumas,
President announced today.
In the fourth quarter, sales decreased 7.8% to $187,842,000. The Company had a
net loss of $249,000 compared to a net loss of $127,000 in the fourth quarter of
the prior year.
In reviewing the quarter, Mr. Sumas reported that the net loss for the quarter
was due to flat same store sales, lower than expected gross margins and
increased payroll costs. Sales decreased in the current quarter due to the
prior year containing a fifteenth week as compared to the current year's
fourteen weeks and the closing of a store in the current year. Same store
sales were flat in the current quarter, despite a comparison to a year ago
quarter that included a strike at six stores, due to the sluggish economy and
competitive openings.
For the full year, the net loss was $807,000, which includes an increase to net
income of $400,000 for the cumulative effect of a change in the method of
accounting for income taxes. This compares with net income in the prior year of
$1,437,000, which included a $1,022,000 gain on the sale of a store. Sales for
the full year decreased 2.6% to $695,070,000. The sales decrease is due to the
prior year containing 53 weeks and the impact of closed stores. Same store
sales for the year increased 1.3%.
The net loss in fiscal 1994 compared to net income in the prior year is
principally attributable to increased promotional spending, chiefly couponing,
in the second and third quarter of this year. Although the additional
promotional spending was partially responsible for increased same store sales
in those quarters, a larger sales increase was expected in order to offset the
costs of these coupons. In addition, gross margin percentages were lower than
expected, fringe benefit and payroll costs increased and a loss was incurred on
the sale of the Morristown store.
At July 30, 1994, the Company was not in compliance with certain financial
covenants in its bank agreement and its private placement agreement. The
Company expects to receive a waiver of the financial covenant and an amendment
of its loan agreement with the banks. The Company is also not in compliance
with a financial covenant in a debt agreement with another lender. This does
not constitute an event of default; however, until this ratio is met or a waiver
obtained, the Company is prevented from borrowing additional funds, declaring
dividends and executing new leases.
<PAGE 20>
With the closing in August 1994 of the Easton, Pa. store, Village Super Market
now owns and operates a chain of 23 supermarkets under the ShopRite name in New
Jersey and Eastern Pennsylvania. The following table summarizes results for the
quarter and year ended July 30, 1994.
July 30, 1994 July 31,1993
Quarter Ended
Sales $187,842,000 $203,800,000
Net Income (Loss) $ (249,000) $ (127,000)
Net Income (Loss) Per Share $ (.09) $ (.05)
Year Ended
Sales $695,070,000 $713,856,000
Net Income (Loss) $ (807,000) $ 1,437,000
Net Income (Loss) Per Share $ (.28) $ .49
<PAGE 21>
EXHIBIT NO. 28B
THIRD QUARTER REPORT
To our shareholders:
The Company had a net loss of $1,131,000 in the third quarter ended April 23,
1994. This compared with net income of $182,000 in the third quarter of the
prior year. The loss for the quarter was principally attributable to an
increase in promotional spending, chiefly couponing. Also contributing to the
loss in the third quarter were lower than expected gross margins, increased
fringe benefit costs and an increase in the loss recorded on the sale of the
Morristown store.
For the first nine months of fiscal 1994, the net loss was $558,000, which
includes an increase to net income of $400,000 for the cumulative effect of the
change in the method of accounting for income taxes. This compares with net
income in the prior year of $1,563,000, which includes a gain, net of tax, of
$1,022,000 on the sale of a store.
Sales for the third quarter were $171,776,000, an increase of 1.4% from the
prior year. Same store sales increased 2.8% this quarter, which was partially
offset by lower sales from stores closed since one year ago. Same store sales
increased in the third quarter as a result of additional promotional spending
and possibly some improvement in the local economy. Sales for the nine month
period were $507,228,000, a slight decrease from the prior year. Same store
sales increased 1.7% for the nine months, which was offset by stores closed
since a year ago.
Gross margins as a percentage of sales for both the quarter and nine month
period were 24.4% compared with 24.3% in both corresponding prior year periods.
High levels of sale item penetration and price competition in the marketplace
have prevented further increases in gross margins.
Operating and administrative expenses as a percentage of sales for the quarter
and nine month period were 23.5% and 22.8%, respectively, compared with 22.2%
in both corresponding prior year periods. The principal reason for these
increases was the higher level of promotional spending, chiefly couponing,
which began in the second quarter and increased further in the third quarter.
Although the additional promotional spending was partially responsible for the
increase in same store sales, a larger sales increase was expected in order to
offset the costs of these coupons. Inclement weather contributed to the lower
than expected sales and also increased snow removal costs. In addition,
fringe benefit costs increased.
A loss of $81,000 on the sale of the Morristown store was recorded in the first
quarter of fiscal 1994. An additional loss of $300,000 was recorded in the
current quarter due to the failure of the Company's former sub-lessee to make
required rent payments.
On March 29, 1994 the Company replaced its expired $20,000,000 revolving/term
loan agreement with a new $30,000,000 loan agreement with two banks. The new
agreement consists of a $10,000,000 term loan, a $12,000,000 revolving loan and
a $8,000,000 convertible revolving loan. At April 23, 1994 the only balance
outstanding on this facility was the $10,000,000 term loan. The $12,000,000
revolving loan, which can be used for any purpose except new store
construction, matures March 31, 1997. The $8,000,000 convertible revolving
loan is to be used only for capital expenditures and can be used through
December 31, 1995.
<PAGE 22>
At April 23, 1994, the Company did not meet financial ratios required by the
above debt agreement and an additional debt agreement with a total of three
lenders. This constitutes and event of default under these agreements. The
Company is engaged in discussions with these lenders regarding this situation.
Without the consent of the two banks, the Company will not be allowed to borrow
under the $8,000,000 convertible revolving loan portion of the credit facility
described above. Without a waiver from another lender, the Company would be pre
vented from borrowing additional funds, executing new leases or declaring
dividends.
As a result of the events of default described above, the Company has
reclassified $22,100,000 of long-term debt as a current liability in the April
23, 1994 balance sheet. There is no indication at this time that any of the
three lenders intend to request immediate payment of these amounts.
The Company is currently in the process of remodeling two stores. A remodel and
expansion of an additional store is planned to begin shortly. A planned
expenditure for 1994 had been the purchase of land for a new superstore.
As this store has not yet received planning board approval, this expenditure has
been rescheduled for fiscal 1995.
Respectfully,
Perry Sumas James Sumas
President Chairman of the Board
June 13, 1994
STATEMENT OF INCOME
(For Three Months Ended) (For Nine Months Ended)
April 23,1994 April 17,1993 April 23,1994 April 17,1993
Sales $171,776,000 $169,431,000 $507,228,000 $510,056,000
NetIncome(loss) $ (1,131,000) $ 182,000 $ (558,000) $ 1,563,000
Per Share $ (.39) $ .06 $ (.19) $ .54
BALANCE SHEET COMPARISONS
April 23,1994 July 31, 1993
Current Assets $ 34,909,000 $ 41,236,000
Current Liabilities 63,304,000 43,539,000
Net Working Capital (Deficit) (28,395,000) (2,303,000)
Long Term Debt 11,399,000 39,470,000
Stockholders' Equity 52,672,000 53,230,000