To Our Shareholders:
The Company had net income of $436,000 in the second quarter ended
January 28, 1995 compared to $157,000 in the prior year second quarter.
For the six month period, net income increased to $519,000 compared to
income before the cumulative effect of an accounting change of $173,000 in
the prior year. Net income increased, despite lower sales, due to more
efficient use of labor and reduced promotional costs, particularly
coupons.
Sales in the second quarter decreased 2.8% from the prior year to
$171,804,000. Same store sales decreased 1.7% in the second 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, comparison to a prior year number that was inflated by higher
promotional spending, and continued sluggishness in the economy.
Sales for the six month period were $339,170,000, an increase of 1.1%
from the prior year. Sales for the six month period increased due to
the current year containing an additional week compared to the prior
year. This increase was partially offset by lower sales due to stores
closed and lower same store sales of .9%.
Gross margins as a percentage of sales for the quarter and six month
period were 24.4% and 24.3%, respectively, compared with 24.3% and 24.4%,
respectively, in the corresponding prior year periods. Price
competition in the marketplace and continued high levels of sale item
penetration have prevented increases in gross margin percentages.
Operating and administrative expenses as a percentage of sales for the
quarter and six month periods decreased to 22.0% and 22.1%, respectively,
compared with 22.4% in both 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 fringe benefit and
supply costs.
The Company completed remodels of its Stirling and Hillsborough stores
earlier this fiscal year. A remodel and expansion of the Chester store
will be completed during the third quarter. The following table
summarizes Village's results for the quarter and six month periods ended
January 28, 1995.
Respectfully,
Perry Sumas, President James Sumas, Chairman of the Board
March 10, 1995
INCOME STATEMENT DATA
January 28,1995 January 22,1994
13 Weeks Ended
Sales $171,804,000 $176,707,000
Net Income $ 436,000 $ 157,000
Net Income Per Share $ .15 $ .06
26 Weeks Ended 25 Weeks Ended
Sales $339,170,000 $335,452,000
Income before accounting
change $ 519,000 $ 173,000
Cumulative effect of
accounting change $ --- $ 400,000
Net Income $ 519,000 $ 573,000
Net Income per share:
Income before accounting change $ .18 $ .06
Cumulative effect of accounting
change $ --- $ .14
Net Income $ .18 $ .20
BALANCE SHEET COMPARISONS
January 28, 1995 July 30, 1994
Current Assets $ 40,520,000 $ 38,141,000
Current Liabilities 44,817,000 42,241,000
Net Working Capital (Deficit) (4,297,000) (4,100,000)
Long Term Debt 36,088,000 36,933,000
Stockholders' Equity 52,942,000 52,423,000