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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: January 24, 2004
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 of 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:
March 2, 2004
Class A Common Stock, No Par Value 1,517,200 Shares
Class B Common Stock, No Par Value 1,594,076 Shares
VILLAGE SUPER MARKET, INC.
INDEX
PART I PAGE NO.
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets . . . . . . . . . . . 3
Consolidated Condensed Statements of Income . . . . . . . . 4
Consolidated Condensed Statements of Cash Flows . . . . . . 5
Notes to Consolidated Condensed Financial Statements. . . . 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 7-12
Item 3. Quantitative & Qualitative Disclosures about Market Risk. . 12-13
Item 4. Controls and Procedures. . . . . . . . . . . . . . . . . . 13
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
January 24, July 26,
2004 2003
ASSETS
Current assets
Cash and cash equivalents $ 40,636 $ 48,500
Merchandise inventories 32,767 32,304
Patronage dividend receivable 1,042 3,634
Note receivable from related party 20,042 ---
Other current assets 5,607 5,207
-------- --------
Total current assets 100,094 89,645
Property, equipment and fixtures, net 96,800 96,320
Investment in related party, at cost 15,875 15,875
Goodwill 10,605 10,605
Other assets 4,157 4,133
-------- --------
TOTAL ASSETS $ 227,531 $ 216,578
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 7,636 $ 7,730
Accounts payable to related party 36,815 32,348
Accounts payable and accrued expenses 26,663 21,323
-------- --------
Total current liabilities 71,114 61,401
Long-term debt 31,336 37,241
Other liabilities 12,088 11,159
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares 18,718 18,535
Class B common stock - no par value,
issued and outstanding 1,594,076 shares 1,035 1,035
Retained earnings 98,968 93,239
Accumulated other comprehensive loss (2,330) (2,330)
Less cost of Class A treasury shares -
(245,600 shares at January 24, 2004 and
267,600 shares at July 26, 2003) (3,398) (3,702)
-------- --------
Total shareholders' equity 112,993 106,777
-------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 227,531 $ 216,578
======== ========
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 26 Wks. Ended 26 Wks. Ended
Jan. 24, 2004 Jan. 25, 2003 Jan. 24, 2004 Jan. 25, 2003
Sales $ 242,209 $ 233,911 $ 468,943 $ 450,449
Cost of sales 180,104 176,020 349,690 338,525
--------- --------- --------- ---------
Gross profit 62,105 57,891 119,253 111,924
Operating and
administrative
expense 52,865 49,650 102,907 96,591
Depreciation and
Amortization 2,263 2,256 4,479 4,459
--------- --------- --------- ---------
Operating income 6,977 5,985 11,867 10,874
Interest expense, net 592 844 1,213 1,623
Income from partnerships ------ 1,639 ------ 1,639
--------- --------- --------- ---------
Income before
income taxes 6,385 6,780 10,654 10,890
Income taxes 2,734 2,740 4,484 4,400
--------- --------- --------- ---------
Net income $ 3,651 $ 4,040 $ 6,170 $ 6,490
========= ========= ========= =========
Net income
per share:
Basic $ 1.18 $ 1.31 $ 2.00 $ 2.11
Diluted $ 1.16 $ 1.28 $ 1.96 $ 2.06
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
26 Weeks Ended 26 Weeks Ended
January 24, 2004 January 25, 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 6,170 $ 6,490
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 4,479 4,459
Deferred taxes 660 700
Provision to value inventories at LIFO 675 200
Tax benefit from exercise of stock options 137 ----
Non-cash stock compensation 46 ----
Changes in assets and liabilities:
(Increase) in merchandise inventories ( 1,138) ( 801)
Decrease in patronage dividend receivable 2,592 1,487
(Increase) decrease in other current assets ( 400) 914
(Increase) in other assets ( 45) ( 257)
Increase in accounts payable to related party 4,467 3,234
Increase in accounts payable and accrued expenses 5,340 1,932
Increase in other liabilities 269 236
-------- --------
Net cash provided by operating activities 23,252 18,594
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in note receivable from related party (20,042) ----
Capital expenditures ( 4,938) ( 5,817)
-------- ---------
Net cash used in investing activities (24,980) ( 5,817)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 220 106
Principal payments of long-term debt ( 5,999) ( 1,520)
Dividends (357) ----
-------- --------
Net cash used in financing activities ( 6,136) ( 1,414)
-------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (7,864) 11,363
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 48,500 33,770
-------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 40,636 $ 45,133
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH
PAYMENTS FOR:
Interest $ 1,508 $ 1,886
Income taxes $ 1,029 $ 300
NON-CASH SUPPLEMENTAL DISCLOSURE:
Investment in related party $ --- $ 93
See accompanying Notes to Consolidated Condensed Financial Statements.
VILLAGE SUPER MARKET, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
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 January 24, 2004 and the consolidated results of operations and
cash flows for the periods ended January 24, 2004 and January 25, 2003.
The significant accounting policies followed by Village Super Market,
Inc. (the "Company") are set forth in Note 1 to the Company's consolidated
financial statements included in the July 26, 2003 Village Super Market, Inc.
Annual Report on Form 10-K, which should be read in conjunction with these
financial statements.
2. The results of operations for the period ended January 24, 2004 are not
necessarily indicative of the results to be expected for the full year.
3. At both January 24, 2004 and July 26, 2003, approximately 70% 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 $10,387,000 and $9,712,000 higher than reported
at January 24, 2004 and July 26, 2003, respectively.
4. The number of common shares outstanding for calculation of net income
per share is as follows:
13 Weeks Ended 26 Weeks Ended
1/24/04 1/25/03 1/24/04 1/25/03
Weighted average shares outstanding - basic 3,094,518 3,082,468 3,092,029 3,079,289
Dilutive effect of employee stock options 51,143 67,385 49,114 68,684
--------- --------- --------- ---------
Weighted average shares outstanding - diluted 3,145,661 3,149,853 3,141,143 3,147,973
========= ========= ========= =========
5. The note receivable from related party of $20,042,000 is invested with
Wakefern Food Corp. ("Wakefern"), the Company's principal supplier. This
unsecured note, which carries interest at prime minus 1.5%, is dated January
15, 2004 and matures January 15, 2005.
6. Comprehensive income was $3,651,000 and $6,170,000 for the quarter and
six-month periods ended January 24, 2004, and $4,040,000 and $6,490,000 for
the quarter and six-month periods ended January 25, 2003.
7. The fair value of each of the 6,000 options granted in the second
quarter of fiscal 2004 was estimated at $11.39 using the Black-Scholes Pricing
model with the following assumptions:
Expected life 6 years
Expected volatility 36.0%
Expected dividend yield 1.0%
Risk-free rate 4.3%
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Village Super Market, Inc. operates a chain of 23 ShopRite supermarkets
in New Jersey and eastern Pennsylvania. The Company is a member of Wakefern,
the nations largest retailer-owned food cooperative and owner of the ShopRite
name. As further described in the Company's Form 10-K, the Company's
ownership interest in Wakefern provides many of the economies of scale in
purchasing, distribution, advanced retail technology and advertising
associated with larger chains.
RESULTS OF OPERATIONS
Sales were $242,209,000 in the second quarter of fiscal 2004. Total
sales and same store sales both increased 3.5% compared to the second quarter
of the prior year. Sales were $468,943,000 for the six-month period of
fiscal 2004, an increase of 4.1% from the prior year. Sales increased due to
continued improvement in the two stores opened in fiscal 2002 and increased
sales in stores remodeled in fiscal 2003. In addition, sales in fiscal 2004
benefited from comparison to a year ago period that included the impact from a
substantial number of store openings by competitors, higher levels of
promotional activity and a softer economy.
Gross profit as a percentage of sales increased to 25.6% and 25.4%,
respectively, in the second quarter and six-month periods of fiscal 2004
compared with 24.7% and 24.8%, respectively, in the corresponding periods of
the prior year. As a percentage of sales, gross profit increased primarily
due to lower promotional spending in the current fiscal year, larger patronage
dividends received in excess of amounts accrued in the current fiscal year,
reduced Wakefern assessment charges and improved gross margins in several
departments. These improvements were partially offset by increased LIFO
charges in the current fiscal year.
Operating and administrative expenses as a percentage of sales
increased to 21.8% and 21.9%, respectively, in the second quarter and
six-month periods of fiscal 2004 compared with 21.2% and 21.4%, respectively,
in the corresponding prior year periods. As a percentage of sales, fringe
benefit costs, primarily contributions to employee heath and pension plans,
utility costs and occupancy costs increased in fiscal 2004. As a percentage
of sales, payroll costs declined in fiscal 2004 compared to the prior year.
Interest expense (net) decreased in the second quarter and six-month
periods of fiscal 2004 compared to the corresponding prior year periods due to
reduced borrowing levels in the current fiscal year. In addition, the prior
fiscal year included interest from a capital lease disposed of in the third
quarter of fiscal 2003.
The second quarter of fiscal 2003 included $1,639,000 ($967,000
after-tax) 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 42.8% and 42.1%,
respectively, for the second quarter and six-month periods of fiscal 2004
compared to 40.4% for both the corresponding periods of the prior year. These
increases are due to recent tax audits of previous fiscal years.
Net income was $3,651,000 in the second quarter of fiscal 2004, a
decrease of 10% from the second quarter of the prior fiscal year. Excluding
the aforementioned $967,000 effect on net income from partnerships in fiscal
2003, net income would have increased from $3,073,000 to $3,651,000, or 19%.
Management believes this is a more appropriate comparison of operating
results, as the partnership income is not expected to recur in the near
future. This increase is attributable to strong sales growth, increased
gross profit percentages and lower interest expense, partially offset by a
higher operating and administrative expense percentage.
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, accounting for patronage dividends earned
as a stockholder of Wakefern, and accounting for pension plans are described
in the Company's Annual Report on Form 10-K for the year ended July 26, 2003.
As of January 24, 2004, 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 $23,252,000 for the
six-month period ended January 24, 2004 compared with $18,594,000 for the
six-month period ended January 25, 2003. This change is attributable to
larger increases in accounts payable to related party and accounts payable and
accrued expenses in the current fiscal year than in the prior year due to the
timing of payments. In addition, patronage dividends received in fiscal 2004
exceeded fiscal 2003.
During the first six months of fiscal 2004, the Company used
$23,252,000 of operating cash flow and $7,864,000 of cash on hand to fund
capital expenditures of $4,938,000, to make debt payments of $5,999,000 and to
invest $20,042,000 of excess cash in a note receivable from Wakefern. The
debt payments made included the first installment of $4,285,714 on the
Company's unsecured Senior Notes. The investment in the note receivable from
Wakefern is a one-year note dated January 15, 2004, which matures
January 15, 2005. These funds were previously invested in a demand deposit
at Wakefern.
Working capital was $28,980,000 at January 24, 2004 compared to
$28,244,000 at July 26, 2003. The working capital ratio was 1.41 to one at
January 24, 2004 compared to 1.46 to one at July 26, 2003. The Company's
working capital needs are reduced since inventory is generally sold by the
time payment to Wakefern and other suppliers are due.
The Company has budgeted approximately $12 million for capital
expenditures in fiscal 2004. Planned expenditures include the expansion and
remodel of the Bernardsville store and equipment for the Somers Point
replacement store. The Company's primary sources of liquidity in fiscal 2004
are expected to be cash on hand at January 24, 2004 and operating cash flow.
The Company has available a $15 million (none outstanding at January 24, 2004)
unsecured revolving credit line, which expires September 16, 2004. The
Company expects to replace this expiring revolving credit facility during
fiscal 2004. There have been no substantial changes as of January 24, 2004
to the contractual obligations discussed on page 6 of the Company's Annual
Report on Form 10-K for the year ended July 26, 2003.
RELATED PARTY TRANSACTIONS
A description of the Company's transactions with Wakefern, its
principal supplier, and with other related parties is included on pages 8,16
and 19 of the Company's Annual Report on Form 10-K for the year ended
July 26, 2003. There have been no significant changes in the Company's
relationship or nature of the transactions with these related parties during
the twenty-six weeks of fiscal 2004, except that the Company invested
$20,042,000 of cash in a note receivable from Wakefern in fiscal 2004 that
was invested in demand and overnight deposits at Wakefern on July 26, 2003.
The note, which carries interest at prime minus 1.5%, is dated
January 15, 2004 and matures January 15, 2005.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In December 2003, the Financial Accounting Standards Board issued SFAS
No. 132 (revised 2003), "Employers' Disclosures about Pensions and Other
Postretirement Benefits", to revise employers' annual and quarterly
disclosures about pension plans and other postretirement benefit plans. It
does not change the measurement or recognition of those plans required by
SFAS No. 87, "Employers' Accounting for Pensions", SFAS No. 88, "Employers'
Accounting for Settlements and Curtailments of Defined Benefit Pension Plans
and for Termination Benefits", and SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions". This Statement retains the
disclosure requirements contained in SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits", which it replaces. It
requires additional disclosures to those in the original SFAS 132 about the
assets, obligations, cash flows, and net periodic benefit cost of defined
benefit pension plans and other defined benefit postretirement plans. The
annual disclosure requirements under this Statement are effective for the
Company's fiscal year ending July 31, 2004, and the quarterly disclosure
requirements are effective for the Company's interim periods beginning with
the quarter ending April 24, 2004.
FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in
this Form 10-Q are or may be considered 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. The Company undertakes no
obligation to update forward-looking statements to reflect developments or
information obtained after the date hereof. The following are among the
principal factors that could cause actual results to differ from the
forward-looking statements: 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 on a cash flow basis;
the success of operating initiatives; consumer spending patterns; increased
cost of goods sold, including increased costs from the Company's principal
supplier, Wakefern; results of ongoing litigation; the results of union
contract negotiations; competitive store openings; the rate of return on
pension assets; and other 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 January 24, 2004, 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% (4.60% at January 24, 2004) on an initial notional
amount of $10,000,000 expiring in September 2009 in exchange for a fixed rate
of 8.12%. The swap agreement notional amount decreases in amounts and on dates
corresponding to the fixed rate obligation it hedges. At January 24, 2004 the
remaining notional amount of the swap agreement was $8,571,429. A 100 basis
point increase in interest rates, applied to the Company's borrowings at
January 24, 2004, would result in an annual increase in interest expense and
a corresponding reduction in cash flow of approximately $85,714.
At January 24, 2004, the Company had demand deposits of $18,614,000 at
Wakefern earning interest at prime less 2.5%, or overnight money market rates,
which are exposed to the impact of interest rate changes. In addition, at
January 24, 2004, the Company had a $20,042,000 adjustable rate promissory
note from Wakefern earning interest at prime less 1.5%, which is exposed to
the impact of interest rate changes.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, the Company carried
out an evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures at the end of the period. 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 that 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 internal
controls over financial reporting during the second quarter of fiscal 2004.
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) First Quarter Report to Shareholders
dated December 15, 2003.
Exhibit 31.1 Certification
Exhibit 31.2 Certification
Exhibit 32.1 Certification (furnished, not filed)
Exhibit 32.2 Certification (furnished, not filed)
6 (b) Reports on Form 8-K.
On March 1, 2004, the Company filed a report on Form 8-K with the SEC
regarding its release announcing consolidated financial results for the second
quarter of fiscal 2004.
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: March 3, 2004 /s/ James Sumas
James Sumas
(Chief Executive Officer)
Date: March 3, 2004 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
Exhibit 28(a)
F To Our Shareholders:
I Net income was $2,519,000 ($.80 per diluted share) in the first quarter
of fiscal 2004, an increase of 3% from the first quarter of the prior
R year. Net income increased primarily due to strong sales growth,
increased gross profit percentages and lower interest expense, partially
S offset by higher operating expense percentages.
T Sales were $226,734,000 in the first quarter of fiscal 2004. Total
sales and same store sales both increased 4.7% compared to the first
quarter of the prior year. Sales increased due to continued improvement
in the two stores opened in fiscal 2002 and increased sales in stores
Q remodeled in fiscal 2003. In addition, sales in the first quarter of
fiscal 2004 benefited from comparison to a year ago period that included
U the impact of a substantial number of store openings by competitors, high
levels of promotional activity and a softer economy.
A
Gross profit as a percentage of sales increased to 25.2% in the first
R quarter of fiscal 2004 compared to 25.0% in the first quarter of the prior
year. Gross profit as a percentage of sales increased primarily due to
T lower promotional spending in the current fiscal quarter. This impact was
partially offset by increased LIFO charges in the current fiscal quarter.
R
Operating and administrative expenses as a percentage of sales
increased to 22.1% in the first quarter of fiscal 2004 compared to 21.7%
in the first quarter of the prior year. Fringe benefit costs, primarily
R required contributions to employee health and pension plans, and utility
costs increased in fiscal 2004. Payroll costs declined in fiscal 2004.
E
On December 12, 2003, Board of Directors declared a semi-annual cash
P dividend of $.14 per Class A common share and $.09 per Class B common
share. These dividends will be payable February 20, 2004 to shareholders
O of record on January 23, 2004.
R
T Respectfully,
Perry Sumas James Sumas
President Chairman of the Board
December 15, 2003
All statements, other than statements of historical fact, included in this
report are or may be considered 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. The Company undertakes no obligation to
update forward-looking statements to reflect developments or information
obtained after the date hereof. The following are among the principal factors
that could cause actual results to differ from the forward-looking statements:
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 on a cash flow basis; the success of operating
initiatives; consumer spending patterns; increased cost of goods sold,
including increased costs from the Company's principal supplier, Wakefern;
results of ongoing litigation; the results of union contract negotiations;
competitive store openings; the rate of return on pension assets; and other
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
October 25, 2003 October 26, 2002
Sales $ 226,734 $ 216,538
Cost of sales 169,586 162,505
---------- ----------
Gross profit 57,148 54,033
Operating and
administrative expense 50,042 46,941
Depreciation and amortization 2,216 2,203
---------- ----------
Operating income 4,890 4,889
Interest expense, net 621 779
---------- ----------
Income before income taxes 4,269 4,110
Income taxes 1,750 1,660
---------- ----------
Net income $ 2,519 $ 2,450
========== ==========
Net income per share:
Basic $ .82 $ .80
Diluted $ .80 $ .78
Gross profit as a % of sales 25.2% 25.0%
Operating and administrative
expense as a % of sales 22.1% 21.7%
Exhibit 31.1
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 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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
report.
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's second quarter that has materially effected, or is
reasonably likely to materially effect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, 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 and material weaknesses in the
design or operation of internal controls over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information 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 control over financial reporting.
Date: March 3, 2004
/s/ James Sumas
James Sumas
Chief Executive Officer
Exhibit 31.2
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 report does not contain any untrue
statement of 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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
report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the
registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's second quarter that has materially effected, or is
reasonably likely to materially effect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: March 3, 2004 /s/ Kevin Begley
Kevin Begley
Chief Financial Officer &
Principal Accounting Officer
Exhibit 32.1
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 10-Q for the period ending January 24, 2004 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
March 3, 2004
Exhibit 32.2
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 10-Q for the period ending January 24, 2004 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 &
Principal Accounting Officer
March 3, 2004