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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 29, 1995
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 (I.R.S. Employer
incorporation or organization) Identification Number)
733 Mountain Avenue, Springfield, New Jersey 07081
(Address of principal executive offices) (Zip Code)
(201 467-2200
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (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 the number of shares outstanding of the issuer's classes of
common stock as of the latest practicable date.
June 1, 1995
Class A, Common Stock, No Par Value 1,315,800 Shares
Class B, Common Stock, No Par Value 1,594,076 Shares
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VILLAGE SUPER MARKET, INC.
INDEX
Part I Page No.
Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets . . . . . . . . . 3
Consolidated Condensed Statements of Income. . . . . . . 4
Consolidated Condensed Statements of Cash Flows. . . . . 5
Notes to Consolidated Condensed Financial
Statements . . . . . . . . . . . . . . . . . . . . . . 6
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . 7 - 8
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 9
Signatures . . . . . . . . . . . . . . . . . . . . . . . 10
Exhibit 28(a). . . . . . . . . . . . . . . . . . . . . . 11
Exhibit 28(b). . . . . . . . . . . . . . . . . . . . . . 12
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Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
VILLAGE SUPER MARKET,INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
April 29,1995 July 30, 1994
ASSETS
Current assets
Cash and cash equivalents $ 8,941 $ 7,246
Merchandise inventories 24,736 25,273
Patronage dividend receivable 1,970 2,783
Miscellaneous receivables 2,744 2,259
Prepaid expenses 549 580
Total current assets 38,940 38,141
Property, equipment and fixtures,net 70,487 71,414
Investment in related party 9,761 9,416
Goodwill, net 10,963 11,138
Other intangibles, net 2,855 3,045
Other assets 2,275 1,639
Total assets $ 135,281 $ 134,793
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 5,096 $ 5,149
Accounts payable to related party 22,626 23,947
Accounts payable & accrued expenses 11,865 12,330
Deferred income taxes 815 815
Total current liabilities 40,402 42,241
Long-term debt, less current portion 39,033 36,933
Deferred income taxes 3,196 3,196
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares (including
447,000 in treasury) 18,129 18,129
Class B common stock - no par value
1,594,076 shares issued & outstanding 1,035 1,035
Retained earnings 39,671 39,444
Less cost of treasury shares (6,185) (6,185)
Total shareholders' equity 52,650 52,423
Total liabilities & shareholders'
equity $ 135,281 $ 134,793
See accompanying notes to consolidated condensed financial statements.
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VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
13 Week End 13 Week End 39 Week End 38 Week End
Apr 29,1995 Apr 23,1994 Apr 29,1995 Apr 23,1994
Sales $ 164,453 $ 171,776 $ 503,624 $ 507,228
Cost of sales 123,959 129,930 380,664 383,545
Gross margin 40,494 41,846 122,960 123,683
Operating and
administrative expense 37,855 40,402 112,956 115,663
Depreciation and
amortization expense 2,134 2,098 6,376 6,420
Operating income (loss) 505 ( 654) 3,628 1,600
Interest expense 991 931 3,060 2,815
Loss on disposal
of assets --- 300 190 381
Income (loss) before
provision for income
taxes and cumulative
effect of accounting
change (486) (1,885) 378 (1,596)
Provision for income tax
expense (benefit) (193) ( 754) 151 (638)
Income (loss) before
cumulative effect of
accounting change (293) (1,131) 227 (958)
Cumulative effect of change
in accounting for
income taxes --- --- --- 400
Net income (loss) $ (293) $ (1,131) $ 227 $ (558)
Net income (loss) per share:
Weighted average number
of common shares
outstanding 2,909,876 2,909,876 2,909,876 2,909,876
Income (loss) before
cumulative effect of
accounting change $ (.10) $ (.39) $ .08 $ (.33)
Cumulative effect of
accounting change --- --- --- .14
Net income (loss) $ (.10) $ (.39) $ .08 $ (.19)
See accompanying notes to consolidated condensed financial statements.
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VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
39 Weeks Ended 38 Weeks Ended
April 29, 1995 April 23, 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 227 $ (558)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Cumulative effect of accounting
change --- (400)
Depreciation and amortization 6,376 6,420
Provision to value inventories
at LIFO 450 500
Loss on disposal of assets --- 381
Changes in assets and liabilities:
(Increase) decrease in inventory 87 (969)
Decrease in patronage dividend
receivable 813 501
Increase (decrease)in misc
receivables (485) 1,137
Decrease in prepaid expenses 31 79
(Increase) decrease in other assets (636) 640
Increase (decrease) in accounts
payable to related party (1,321) 166
(Decrease) in accounts payable
and accrued expenses ( 465) (2,719)
(Decrease) in income taxes payable --- (265)
Net cash provided by operating
activities 5,077 4,913
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (5,084) (3,859)
Investment in related party ( 345) (341)
Proceeds from sale of assets, net --- 58
Net cash used in investing
activities (5,429) (4,142)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
long-term debt 6,600 10,000
Principal payments of long-term debt (4,553) (15,850)
Net cash provided (used) by
financing activities 2,047 ( 5,850)
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 1,695 ( 5,079)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,246 6,619
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 8,941 $ 1,540
See accompanying notes to consolidated condensed financial statements.
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VILLAGE SUPER MARKET, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
normal and recurring accruals) necessary to present fairly the financial
position as of April 29, 1995 and July 30, 1994 and the results of
operations and cash flows for the periods ended April 29, 1995 and April
23, 1994.
The significant accounting policies followed by the Company are set
forth in Note 1 to the Company's financial statements in the July 30, 1994
Village Super Market, Inc. Annual Report.
Effective August 1, 1993, the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes." Under Statement 109, the liability method
is used in accounting for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates in effect.
As permitted by Statement 109, the Company has elected not to restate
the financial statements of any prior years. There was no effect from the
change in accounting on pretax income for the periods presented. The
cumulative effect of the change increased net income by $400,000 ($.14 per
share) in the quarter ended October 23, 1993.
2. The results of operations for the period ended April 29, 1995 are not
necessarily indicative of the results to be expected for the full year.
3. At both April 29, 1995 and July 30, 1994 approximately 68% of the
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 $6,918,000 and $6,468,000 higher
than reported at April 29, 1995 and July 30, 1994, respectively.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
Sales for the third quarter of fiscal 1995 were $164,453,000, a
decrease of 4.3% from the third quarter of the prior year. Same store
sales decreased 1.3% in the quarter. Sales were also lower due to the
closing of the Easton store in August 1994. Same store sales declined due
to the effects of new competitive entries, continued sluggishness in the
economy and comparison to a prior year period that included higher
promotional spending. Sales for the thirty-nine weeks ended April 29,
1995 were $503,624,000, a decrease of .7% from the prior year. Sales
decreased due to stores closed since one year ago and lower same store
sales of 1.1%. This decrease was partially offset by the current year
containing thirty-nine weeks compared to thirty-eight weeks in the prior
year.
Gross margins as a percentage of sales for the quarter and nine months
ended April 29, 1995 were 24.6% and 24.4%, respectively, compared with
24.4% in both corresponding prior year periods. The improvement in gross
margin percentage in the third quarter was due to the increasing mix of
sales in high margin perishable departments. Price competition in the
marketplace and continued high levels of sale item penetration have
prevented further increases in gross margin throughout fiscal 1995.
Operating and administrative expenses as a percentage of sales for the
quarter and nine months decreased to 23.0% and 22.4%, respectively,
compared with 23.5% and 22.8%, respectively, in the corresponding prior
year periods. These improvements were due to lower promotional costs and
lower store payroll costs than one year ago, partially offset by higher
supply costs.
LIQUIDITY AND FINANCIAL RESOURCES
Current liabilities exceeded current assets by $1,462,000 at April 29,
1995 as compared to $4,100,000 at July 30, 1994. The current ratio was
.96 at April 29, 1995 compared to .90 at July 30, 1994. During the nine
month period, net cash provided by operating activities of $5,077,000 and
increased borrowings under the revolving line of credit of $6,600,000
resulted in a net increase in cash of $1,695,000 after payments of long
term debt of $4,553,000 and capital expenditures of $5,084,000. The
amount outstanding on the line of credit was $10,600,000 at April 29, 1995.
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The majority of capital expenditures in the current fiscal year relate
to the completed expansion and remodel of the Stirling, Hillsborough and
Chester stores. The Company has budgeted approximately $8,000,000 for
capital expenditures this fiscal year. The Company expects to finance
these expenditures through internally generated funds and borrowing under
its credit facility.
On April 29, 1995, the Company was in compliance with all provisions of
its revolving/term loan agreement. The Company did not meet a cash flow to
fixed charge coverage ratio contained in two other debt agreements with a
different lender. This does not constitute an event of default. However,
until this ratio is met or unless a waiver is obtained, the agreements
prevent the Company from borrowing additional funds (other than the
Company's revolving credit line), declaring dividends and executing
new leases. The Company is currently negotiating with this lender for
relief under certain provisions of the debt agreement.
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PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6(a) Exhibits:
Exhibit 28(a) Press Release dated June 1, 1995.
Exhibit 28(b) Second Quarter Report to Shareholders
6(b) Reports on form 8-K.
None.
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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
Date: June 1, 1995 /s/ Perry Sumas
Perry Sumas (President)
Date: June 1, 1995 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)