Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended: April 26, 2003
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 (I. R. S. Employer
or organization) Identification No.)
733 MOUNTAIN AVENUE, SPRINGFIELD, NEW JERSEY 07081
(Address of principal executive offices) (Zip Code)
(973) 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 by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)
Yes ____ No __X_
Indicate the number of shares outstanding of the issuer's classes of common
stock as of the latest practicable date:
May 30, 2003
Class A Common Stock, No Par Value 1,493,200 Shares
Class B Common Stock, No Par Value 1,594,076 Shares
The Registrant was not involved in bankruptcy proceedings during the preceding
five years or any time prior thereto.
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 - 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . 10 - 14
Item 3. Quantitative & Qualitative Disclosures about Market Risk . 14 - 15
Item 4. Controls and Procedures. . . . . . . . . . . . . . . . . . . 15
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 16
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 16
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
April 26, July 27,
2003 2002
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 44,630 $ 33,770
Merchandise inventories 31,116 33,780
Patronage dividend receivable 2,227 2,196
Other current assets 5,506 6,862
-------- --------
Total current assets 83,479 76,608
Property, equipment and fixtures, net 95,305 98,674
Investment in related party, at cost 13,756 13,663
Goodwill 10,605 10,605
Other assets 3,739 4,503
-------- --------
TOTAL ASSETS $ 206,884 $ 204,053
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 7,337 $ 3,061
Accounts payable to related party 29,007 30,631
Accounts payable and accrued expenses 20,903 22,705
-------- --------
Total current liabilities 57,247 56,397
Long-term debt 35,928 43,634
Other liabilities 7,682 6,579
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares 18,482 18,411
Class B common stock - no par value,
1,594,076 shares issued & outstanding 1,035 1,035
Retained earnings 90,856 82,517
Accumulated other comprehensive loss ( 616) ( 616)
Less cost of Class A treasury shares
(269,600 shares at April 26, 2003
and 282,200 shares at July 27, 2002) ( 3,730) (3,904)
-------- --------
Total shareholders' equity 106,027 97,443
-------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 206,884 $ 204,053
======== ========
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
13 Wks. Ended 13 Wks. Ended 39 Wks. Ended 39 Wks. Ended
Apr. 26, 2003 Apr. 27, 2002 Apr. 26, 2003 Apr. 27, 2002
Sales $ 221,450 $ 216,525 $ 671,899 $ 657,992
Cost of sales 166,281 162,854 504,806 494,269
---------- ---------- ---------- ----------
Gross profit 55,169 53,671 167,093 163,723
Operating and
administrative
expense 49,058 47,007 145,648 141,181
Depreciation and
amortization 2,231 2,051 6,690 5,809
Non-cash
impairment charge --- --- --- 640
---------- ---------- ---------- ----------
Operating income 3,880 4,613 14,755 16,093
Income from
partnerships --- --- 1,639 ---
Interest expense, net 698 862 2,321 2,350
---------- ---------- ---------- ----------
Income before
income taxes 3,182 3,751 14,073 13,743
Income taxes 1,285 1,413 5,685 5,060
---------- ---------- ---------- ----------
Net income $ 1,897 $ 2,338 $ 8,388 $ 8,683
========== ========== ========== ==========
Net income
per share:
Basic $ .61 $ .76 $ 2.72 $ 2.85
Diluted $ .60 $ .74 $ 2.66 $ 2.77
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
39 Weeks Ended 39 Weeks Ended
April 26, 2003 April 27, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,388 $ 8,683
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 6,690 5,809
Non-cash impairment charge --- 640
Tax benefit from exercise of stock options 71 ---
Deferred taxes 750 225
Provision to value inventories at LIFO 450 400
Changes in assets and liabilities:
(Increase) decrease in merchandise inventories 2,214 ( 3,371)
(Increase) decrease in patronage dividend receivable ( 31) 1,095
(Increase) decrease in other current assets 1,356 ( 467)
(Increase) in other assets ( 163) ( 214)
Increase (decrease) in accounts payable to related party ( 1,624) 40
Increase (decrease) in accounts payable and
accrued expenses ( 1,802) 1,116
Increase in other liabilities 353 295
------- --------
Net cash provided by operating activities 16,652 14,251
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 7,604) ( 17,101)
Proceeds from disposal of assets 4,006 ---
------- -------
Net cash used in investing activities ( 3,598) ( 17,101)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt --- 3,000
Proceeds from exercise of stock options 125 440
Principal payments of long-term debt ( 2,319) ( 2,098)
------- -------
Net cash provided by (used in) financing activities ( 2,194) 1,342
------- -------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 10,860 ( 1,508)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 33,770 31,156
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 44,630 $ 29,648
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH
PAYMENTS FOR:
Interest (net of amounts capitalized) $ 3,207 $ 3,458
Income taxes $ 1,925 $ 5,456
NON-CASH SUPPLEMENTAL DISCLOSURE:
Investment in related party $ 93 $ 550
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of normal
and recurring accruals) necessary to present fairly the consolidated financial
position as of April 26, 2003 and the consolidated results of operations and
cash flows for the periods ended April 26, 2003 and April 27, 2002.
The significant accounting policies followed by the Company are set
forth in Note 1 to the Company's consolidated financial statements in the
July 27, 2002 Village Super Market, Inc. Annual Report on Form 10-K, which
should be read in conjunction with this Form 10-Q.
2. The results of operations for the period ended April 26, 2003 are not
necessarily indicative of the results to be expected for the full year.
3. At both April 26, 2003 and July 27, 2002, approximately 66% 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 $9,812,000 and $9,362,000 higher than reported at
April 26, 2003 and July 27, 2002, respectively.
4. The number of common shares outstanding for calculation of net income
per share is as follows:
13 Weeks Ended 39 Weeks Ended
4/26/03 4/27/02 4/26/03 4/27/02
Weighted Average Shares Outstanding-Basic 3,085,650 3,067,747 3,084,059 3,051,943
Dilutive Effect of Employee Stock Options 62,146 85,296 66,505 79,381
Weighted Average Shares Outstanding-Diluted 3,147,796 3,153,043 3,150,564 3,131,324
5. ADOPTION OF NEW ACCOUNTING STANDARDS
The Company has one stock-based employee compensation plan, which is
described in note 7 of the Company's Annual Report on Form 10-K for the year
ended July 27, 2002. During the third quarter of fiscal 2003, the Company
adopted the fair value recognition provisions of Financial Accounting
Standards Board ("FASB") Statement No. 123, "Accounting for Stock-Based
Compensation", prospectively to all employee awards granted, modified or
settled after July 28, 2002. Prior to fiscal 2003, the Company accounted
for its employee stock option plan under the recognition and measurement
provisions of APB Opinion No. 25, "Accounting for Stock Issued to Employees".
In accordance with the intrinsic value method of accounting for stock options
under APB No. 25, no stock-based employee compensation cost is reflected in
fiscal 2002 net income, as all options granted had an exercise price equal to
the fair value of the Company's stock at the date of grant. The following
table illustrates the effect on net income and net income per share if the
fair value based method had been applied to all outstanding and unvested
awards in each period.
13 Weeks Ended 39 Weeks Ended
4/26/03 4/27/02 4/26/03 4/27/02
Net income, as reported $ 1,897 $ 2,338 $ 8,388 $ 8,683
Add: Stock-based employee
compensation expense included in
reported net income, net of related
tax effects 6 --- 13 ---
Deduct: Total stock-based employee
compensation expense determined
under fair value method for all
awards, net of related tax effects ( 6) (17) (13) (53)
------ ------ ------- ------
Pro forma net income $ 1,897 $ 2,321 $ 8,388 $ 8,630
====== ====== ====== ======
Net income per share:
Basic - as reported $ .61 $ .76 $ 2.72 $ 2.85
Basic - pro forma $ .61 $ .76 $ 2.72 $ 2.83
Diluted - as reported $ .60 $ .74 $ 2.66 $ 2.77
Diluted - pro forma $ .60 $ .74 $ 2.66 $ 2.76
Effective July 28, 2002, the Company adopted the provisions of FASB
Statement 143, "Accounting for Asset Retirement Obligations." This statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement cost. The implementation of this statement had an immaterial
effect on the consolidated financial statements of the Company.
Effective July 28, 2002, the Company adopted the provisions of FASB
Statement 144, "Accounting for the Impairment or Disposal of Long-lived
Assets." This statement requires that one accounting model be used for
long-lived assets to be disposed of, whether previously held and used or newly
acquired. This statement also broadens the presentation of discontinued
operations to include more disposal transactions. The implementation of this
statement did not have any impact on the consolidated financial
statements of the Company.
In June 2002, the FASB issued Statement 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This statement requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of a commitment to an exit or
disposal plan and applies to any exit or disposal activities initiated after
December 31, 2002. The implementation of this statement did not have any
impact on the consolidated financial statements of the Company.
In November 2002, the FASB Emerging Issues Task Force (EITF) reached a
consensus with respect to EITF Issue No. 02-16, "Accounting for Consideration
Given by a Vendor to a Customer." This consensus includes a presumption that
cash consideration received by a customer from a vendor is to be treated as a
reduction of cost of sales in the customer's income statement. As the Company
already accounts for such consideration as a reduction of cost of sales, this
EITF has no impact on the Company's fiscal 2003 consolidated financial
statements.
6. SALE OF REAL ESTATE
On April 2, 2003, the Company sold the land and building currently
occupied by the Somers Point, NJ store to a real estate investment trust (the
"REIT") for $3,500,000 plus the reimbursement of certain soft costs. The
Company's purpose in entering into this transaction was to provide for the
development of an 80,000 sq. ft. replacement store in Somers Point with
minimal cash outlay by the Company, and to ensure continued occupancy of the
Springfield, NJ store and the Company's headquarters.
The Company also executed leases with the REIT for the replacement store
in Somers Point and to continue occupancy of the current Somers Point store
until the replacement store is constructed by the REIT.
In addition, the Company executed long-term leases with the REIT for the
Springfield store and the Company's headquarters, which were previously leased
from a realty company owned by certain officers of the Company (the "Realty
Company"). The Company canceled its current leases with the Realty Company.
The combined annual rents of these two new leases are approximately the same
as the annual rents of the leases cancelled.
As part of this transaction, the shareholders of the Realty Company sold
their shares in the Realty Company to the REIT. The Realty Company's assets
consist substantially of the Springfield store, the Company headquarters and
undeveloped land in Somers Point upon which a 130,000 sq. ft. retail center
is to be developed by the REIT.
This transaction resulted in no gain or loss to the Company.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales were $221,450,000 in the third quarter of fiscal 2003, an increase
of 2.3% from the prior year. Same store sales increased 1.2% from the prior
year. Same store sales exclude the Hammonton, NJ store opened on March 6, 2002
and the Ventnor, NJ store closed on February 5, 2002. Approximately half of
the same store sales increase is due to higher sales at the Garwood, NJ store,
which opened September 26, 2001, and is included in same store sales beginning
with the second quarter of fiscal 2003. Sales were $671,899,000 for the nine
month period of fiscal 2003, an increase of 2.1% from the prior year. Same
store sales increased 1.3% for the first nine months of fiscal 2003.
Same store sales increased less this fiscal year than in recent fiscal
years due to a substantial number of store openings by competitors near the
Company's stores in the last year, a softening of the economy and increased
levels of promotional activity in New Jersey. The Company estimates that the
timing of the 2003 Super Bowl occurring in the second fiscal quarter as
compared to the 2002 Super Bowl occurring in the third fiscal quarter,
decreased sales by .5% in the third quarter. Based on the factors mentioned
above, and two additional store openings by competitors in April and May of
2003, we expect same store sales in the fourth quarter of fiscal 2003 to be
flat to a 1.0% increase.
Gross profit as a percentage of sales was 24.9% in both the third quarter
and nine month periods of fiscal 2003 compared with 24.8% and 24.9%,
respectively, in the corresponding prior year periods. Gross profit as a
percentage of sales increased in the third quarter of fiscal 2003 due to
improved product mix. This increase was partially offset by higher LIFO
charges in the current quarter and incentives received one year ago in
connection with a store opening. Gross profit as a percentage of sales was
flat for the nine month period compared to the prior year as improved product
mix in the current year was offset by higher promotional spending in the
current year and incentives received one year ago in connection with the two
store openings.
Operating and administrative expenses as a percentage of sales were 22.2%
and 21.7%, respectively, in the quarter and nine month periods of fiscal 2003
compared with 21.7% and 21.5%, respectively, in the corresponding prior year
periods. Fringe benefit costs, particularly contributions to union health and
pension plans, snow removal and energy costs increased in fiscal 2003.
Professional fees and circular costs decreased in fiscal 2003.
Depreciation and amortization expense increased in the third quarter
and nine month periods of fiscal 2003 compared to the prior year due to
additional depreciation on the substantial fixed asset additions placed in
service in fiscal 2002, partially offset by the discontinuance of depreciation
on the closed Ventnor store.
The Company recorded a non-cash impairment charge of $640,000 in the
first quarter of fiscal 2002 to write off the book value of the equipment of
the Ventnor store.
Interest expense (net) declined in the third quarter of fiscal 2003
compared to the prior year due to lower interest rates and reduced borrowing
levels. Interest expense (net) for the nine month period of fiscal 2003 is
approximately the same as the prior year as the benefit of lower rates and
reduced borrowing levels in fiscal 2003 are offset by the first quarter of
fiscal 2002 including $171,000 of interest cost capitalized related to the
construction of the new store.
The second quarter of fiscal 2003 includes $1,639,000 of distributions
received from two partnerships in which the Company is a limited partner. The
Company's ownership interest in these partnerships resulted from its leasing
of supermarkets in two shopping centers. The Company remains a tenant in one
of the shopping centers. The Company's accounting for these partnerships
under the equity method had previously resulted in a zero investment balance
in the consolidated financial statements.
The effective income tax rate increased to 40.4% for both the third
quarter and nine month periods of fiscal 2003 compared to 37.7% and 36.8%,
respectively, in the corresponding periods of the prior year. This increase
is due to enacted changes in state tax law.
Net income was $1,897,000 in the third quarter of fiscal 2003, a
decrease of 18.9% from the prior year. This decrease is attributable to
higher operating and administrative expenses, principally fringe benefit costs
and a higher effective tax rate.
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 and 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 preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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. The Company's critical accounting policies relating to the
impairment of long-lived assets and accounting for patronage dividends earned
as a stockholder of Wakefern Food Corp. are described in the Company's Annual
Report on Form 10-K for the year ended July 27, 2002. As of April 26, 2003,
there have been no material changes to any of the critical accounting policies
contained therein.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $16,652,000 for the nine
months ended April 26, 2003 compared with $14,251,000 for the nine month
period ended April 27, 2002. During the first nine months of fiscal 2003, the
Company had capital expenditures of $7,604,000, made debt payments of
$2,319,000 and increased cash on hand by $10,860,000. In addition, the
Company received $4,006,000 in April 2003 from the sale of assets to a real
estate investment trust. A comprehensive description of this transaction,
which resulted in no gain or loss to the Company, is included herein as
Note 6. Working capital was $26,232,000 at April 26, 2003 compared to
$20,211,000 at July 27, 2002. The working capital ratio was 1.46 to one at
April 26, 2003 compared to 1.36 to one at July 27, 2002.
The Company has budgeted approximately $12,000,000 for capital
expenditures in fiscal 2003. The Company has completed the remodel of its
English Creek, NJ store. Remodels of the Rio Grande, NJ and Hillsborough, NJ
store are in process. The Company's primary sources of liquidity in fiscal
2003 are cash on hand and operating cash flow. The Company has available a
$15,000,000 (none outstanding at April 26, 2003) unsecured revolving credit
line which expires September 16, 2004.
There have been no substantial changes as of April 26, 2003 to the
contractual obligations discussed on page 5 of the Company's Annual Report on
Form 10-K for the year ended July 27, 2002.
RELATED PARTY TRANSACTIONS
A description of the Company's transactions with Wakefern Food Corp., its
principal supplier, and with other related parties is included on page 6 and
14 of the Company's Annual Report on Form 10-K for the year ended July 27, 2002
There have been no significant changes in the Company's relationship or nature
of the transactions with Wakefern during the thirty nine weeks of fiscal 2003.
During the third quarter of fiscal 2003, the Company completed the
sale of real estate to a real estate investment trust. This transaction
included the cancellation of two leases with related parties. A comprehensive
description of this transaction is included herein as Note 6.
FORWARD-LOOKING STATEMENTS:
This Form 10-Q contains "forward-looking statements" within the meaning of
federal securities law. The Company cautions the reader that there is no
assurance that actual results or business conditions will not differ materially
from future results, whether expressed, suggested or implied by such
forward-looking statements. Such potential risks and uncertainties include,
without limitation, local economic conditions, competitive pressures from the
Company's operating environment, the ability of the Company to maintain and
improve its sales and margins, the ability to attract and retain qualified
associates, the availability of new store locations, the availability of
capital, the liquidity of the Company, the success of operating initiatives
and other risk factors detailed herein and in other filings of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of operations, the Company is exposed to market
risks arising from adverse changes in interest rates. Market risk is defined
for these purposes as the potential change in the fair value resulting from an
adverse movement in interest rates. As of April 26, 2003, the Company's only
variable rate borrowings relate to a swap agreement. On October 18, 2001, the
Company entered into an interest rate swap agreement with a major financial
institution pursuant to which the Company pays a variable rate of six-month
LIBOR plus 3.36% (4.65% at April 26, 2003) on a notional amount of $10,000,000
expiring in September 2009 in exchange for a fixed rate of 8.12%. A 100 basis
point increase in interest rates, applied to the Company's borrowings at
April 26, 2003, would result in an annual increase in interest expense and a
corresponding reduction in cash flow of approximately $100,000.
At April 26, 2003, the Company had demand deposits of $16,611,000 earning
interest at prime less 2.5%, which are exposed to the impact of interest rate
changes.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, within the 90 days
prior to the filing date of this report, the Company carried out an evaluation
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. 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 the 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. There have been no
significant changes in the Company's internal controls or in other factors,
which could significantly affect internal controls subsequent to the date the
Company carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that
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.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
6 (a) Exhibits
Exhibit 28 (a) - Press Release dated May 30, 2003.
Exhibit 28 (b) - Second Quarter Report to Shareholders
dated March 13, 2003.
Exhibit 99.1 - Certification
Exhibit 99.2 - Certification
6 (b) Reports on Form 8-K.
None
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 4, 2003 /s/ James Sumas
James Sumas
(Chief Executive Officer)
Date: June 4, 2003 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
Certification
I, Kevin Begley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Village Super
Market, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: June 4, 2003
/s/ Kevin Begley
Kevin Begley
Chief Financial Officer
Certification
I, James Sumas, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Village Super
Market, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses
in internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls;
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: June 4, 2003
/s/ James Sumas
James Sumas
Chief Executive Officer
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Village Super Market, Inc.
(the "Company") on Form 10Q for the period ending April 26, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
James Sumas, Chief Executive Officer of the Company certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002,
that:
1. The Report fully complies with the requirements of Section 13 (a)
or 15 (d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/ James Sumas
James Sumas
Chief Executive Officer
June 4, 2003
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Village Super Market, Inc.
(the "Company") on Form 10Q for the period ending April 26, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Kevin Begley, Chief Financial Officer, of the Company certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002,
that:
1. The Report fully complies with the requirements of Section 13 (a)
or 15 (d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/ Kevin Begley
Kevin Begley
Chief Financial Officer
June 4, 2003
Exhibit 28(a)
VILLAGE SUPER MARKET, INC.
REPORTS RESULTS FOR THE QUARTER AND NINE MONTHS ENDED
APRIL 26, 2003
Contact: Kevin Begley, C. F. O.
(973) 467-2200 - Ext. 220
Springfield, New Jersey - May 30, 2003 - Village Super Market, Inc.
(NSD-VLGEA) today reported sales and net income for the third quarter ended
April 26, 2003.
Net income was $1,897,000 ($.60 per diluted share) in the third quarter of
fiscal 2003, a decrease of 19% from the prior year. Third quarter results were
adversely impacted by increased contributions to union health and pension
plans, a soft economy and a higher effective tax rate.
Sales in the third quarter were $221,450,000, an increase of 2.3% from
the prior year. Same store sales increased 1.2%. Approximately half of the
same store sales increase is due to higher sales at the Garwood, NJ store,
which opened September 26, 2001, and is included in same store sales beginning
in the second quarter of fiscal 2003. Same store sales increased less this
fiscal year than in recent years due to a substantial number of store openings
by competitors near the Company's stores in the last year, a softening of the
economy and increased levels of promotional activity in New Jersey.
Net income for the nine month period of fiscal 2003 was $8,388,000
($2.66 per diluted share), a decrease of 3% from the prior year. Excluding
$1,639,000 (pre tax) of income received from two partnerships in fiscal 2003
and a $640,000 (pre tax) non-cash impairment charge in the prior year, net
income declined 19% in the nine month period. Sales were $671,899,000 for the
nine month period of fiscal 2003, an increase of 2.1% from the prior year.
Same store sales increased 1.3% for the first nine months of fiscal 2003.
James Sumas, Chief Executive Officer, said "Despite the challenges of a
competitive marketplace and a weak economic environment, we achieved positive
operating results in the third quarter. We don't anticipate any easing of
competitive activities in the fourth quarter. We expect same store sales in
the fourth quarter of fiscal 2003 to be flat to a 1.0% increase. Based on
these factors, we believe it will be difficult to match the earnings level
achieved in the fourth quarter of the prior fiscal year."
Village Super Market operates a chain of 23 supermarkets under the
ShopRite name in New Jersey and eastern Pennsylvania.
This Press Release contains "forward looking statements" within the
meaning of federal securities law. The Company cautions the reader that there
are no assurances that actual results or business conditions will not differ
materially from future results, whether expressed, suggested or implied by
such forward looking statements. Such potential risks and uncertainties
include, without limitation, local economic conditions, competitive pressures
from the Company's operating environment, the ability of the Company to
improve its sales and margins, the ability to attractand retain qualified
associates, the availability of new store locations, the availability of
capital, the liquidity of the Company on a cash flow basis, the success of
operating initiatives and other risk factors detailed herein and in the
Company's filings with the SEC.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
13 Wks. Ended 13 Wks. Ended 39 Wks. Ended 39 Wks. Ended
Apr. 26, 2003 Apr. 27, 2002 Apr. 26, 2003 Apr. 27, 2002
Sales $ 221,450 $ 216,525 $ 671,899 $ 657,992
Cost of sales 166,281 162,854 504,806 494,269
---------- ---------- ---------- ----------
Gross profit 55,169 53,671 167,093 163,723
Operating and
administrative
expense 49,058 47,007 145,648 141,181
Depreciation and
amortization 2,231 2,051 6,690 5,809
Non-cash
impairment charge --- --- --- 640
---------- ---------- ---------- ----------
Operating income 3,880 4,613 14,755 16,093
Income from
partnerships --- --- 1,639 ---
Interest expense, net 698 862 2,321 2,350
---------- ---------- ---------- ----------
Income before
income taxes 3,182 3,751 14,073 13,743
Income taxes 1,285 1,413 5,685 5,060
---------- ---------- ---------- ----------
Net income $ 1,897 $ 2,338 $ 8,388 $ 8,683
=========== =========== ========== ===========
Net income
per share:
Basic $ .61 $ .76 $ 2.72 $ 2.85
Diluted $ .60 $ .74 $ 2.66 $ 2.77
Gross profit as a
% of sales 24.9% 24.8% 24.9% 24.9%
Operating and admin.
expense as a
% of sales 22.2% 21.7% 21.7% 21.5%
Exhibit 28(b)
To our Shareholders:
Net income was $4,040,000 ($1.28 per diluted share) in the second quarter
of fiscal 2003, an increase of 8% from the prior year. Results for the second
quarter of fiscal 2003 include $1,639,000 (pre-tax) of income received from
interests in two partnerships. Excluding this partnership income, net income
in the second quarter of fiscal 2003 was $3,063,000 ($.97 per diluted share),
an 18% decrease from the prior year. Second quarter results were adversely
impacted by increased promotional spending, a sluggish economy and a higher
effective tax rate.
Sales in the second quarter were $233,911,000, an increase of 1.4% from
the prior year. Same store sales increased 2.2%. Approximately half of the
same store sales increase is due to higher sales at the Garwood, NJ store,
which opened September 26, 2001, and is included in same store sales for the
first time in the second quarter of fiscal 2003. Same store sales increased
less this fiscal year than in recent years due to substantial number of store
openings by competitors near the Company's stores in the last year, a softening
of the economy and increased levels of promotional activity in New Jersey.
The Company estimates that the timing of the 2003 Super Bowl occurring in the
second fiscal quarter as compared to the prior year Super Bowl occurring in
the third fiscal quarter, increased sales by .5% in the second quarter.
Net income for the six month period of fiscal 2003 was $6,490,000 ($2.06
per diluted share), an increase of 2% from the prior year. Excluding the
income received from the partnerships described above and a non-cash impairment
charge in the prior year, net income declined 18% in the six month period.
Despite the sluggish economy and intense competition, we were able to
achieve positive operating results in the second quarter at the same time many
in our industry are struggling. We don't anticipate any easing in the
competitive climate in the third quarter. In addition, the third quarter will
include a negative impact from the recent severe snowstorm and a substantial
increase in health insurance costs. We expect same store sales in the third
quarter of fiscal 2003 to be flat to a 1.5% increase. Based on these factors,
we believe it will be difficult to match the earnings level achieved in the
third quarter of the prior fiscal year.
Village Super Market operates a chain of 23 supermarkets under the
ShopRite name in New Jersey and eastern Pennsylvania
Please be advised that effective December 9, 2002 the Company has
appointed American Stock Transfer and Trust Company as its stock transfer
agent and registrar. They can be contacted at: American Stock Transfer and
Trust Company, 59 Maiden Lane, New York, NY 10038. Phone: 877-777-0800.
Respectfully,
Perry Sumas James Sumas
President Chairman of the Board
March 13, 2003
This report contains "forward looking statements" within the meaning of
federal securities law. The Company cautions the reader that there are no
assurance that actual results or business conditions will not differ
materiallyfrom future results, whether expressed, suggested or implied by such
forward lookingstatements. Such potential risks and uncertainties include,
without limitation,local economic conditions, competitive pressures from the
Company's operating environment, the ability of the Company to improve its
sales and margins, the ability to attract and retain qualified associates, the
availability of new store locations, the availability of capital, the
liquidity of the Company on a cash flow basis, the success of operating
initiatives and other risk factors detailed herein and in the Company's
filings with the SEC.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
13 Wks. Ended 13 Wks. Ended 26 Wks. Ended 26 Wks. Ended
Jan. 25, 2003 Jan. 26, 2002 Jan. 25, 2003 Jan. 26, 2002
Sales $ 233,911 $ 230,636 $ 450,449 $ 441,468
Cost of sales 176,020 173,100 338,525 331,415
---------- ---------- ---------- ----------
Gross profit 57,891 57,536 111,924 110,053
Operating and
administrative
expense 49,650 48,988 96,591 94,175
Depreciation and
amortization 2,256 1,921 4,459 3,758
Non-cash impairment
charge --- --- --- 640
---------- ---------- ---------- ----------
Operating income 5,985 6,627 10,874 11,480
Interest expense, net 844 843 1,623 1,488
Income from partnerships 1,639 --- 1,639 ---
---------- ---------- ---------- ----------
Income before
income taxes 6,780 5,784 10,890 9,992
Income taxes 2,740 2,060 4,400 3,647
---------- ---------- --------- ----------
Net income $ 4,040 $ 3,724 $ 6,490 $ 6,345
========== =========== ========= ==========
Net income
per share:
Basic $ 1.31 $ 1.22 $ 2 .11 $ 2.08
Diluted $ 1.28 $ 1.19 $ 2 .06 $ 2.03
Gross profit as a
% of sales 24.7% 24.9% 24.8% 24.9%
Operating and admin.
expenses as a
% of sales 21.2% 21.2% 21.4% 21.3%