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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: April 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 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:
June 1, 2004
Class A Common Stock, No Par Value 1,534,700 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. . . . . . . . . . . . . . 8 - 12
Item 3. Quantitative & Qualitative Disclosures about Market Risk . . . 13
Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . . . . 14
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 15
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VILLAGE SUPER MARKET, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
April 24, July 26,
2004 2003
ASSETS
Current assets
Cash and cash equivalents $ 28,949 $ 48,500
Merchandise inventories 31,440 32,304
Patronage dividend receivable 2,760 3,634
Note receivable from related party 20,148 ----
Other current assets 5,654 5,207
------- -------
Total current assets 88,951 89,645
Property, equipment and fixtures, net 98,437 96,320
Investment in related party, at cost 15,875 15,875
Goodwill 10,605 10,605
Other assets 4,095 4,133
-------- --------
TOTAL ASSETS $ 217,963 $ 216,578
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 7,636 $ 7,730
Accounts payable to related party 29,336 32,348
Accounts payable and accrued expenses 22,055 21,323
-------- --------
Total current liabilities 59,027 61,401
Long-term debt 30,291 37,241
Other liabilities 12,552 11,159
Commitments and Contingencies
Shareholders' equity
Class A common stock - no par value,
issued 1,762,800 shares 18,885 18,535
Class B common stock - no par value,
1,594,076 shares issued & outstanding 1,035 1,035
Retained earnings 101,658 93,239
Accumulated other comprehensive loss (2,330) ( 2,330)
Less cost of Class A treasury shares
(228,100 shares at April 24, 2004
and 267,600 shares at July 26, 2003) ( 3,155) (3,702)
-------- --------
Total shareholders' equity 116,093 106,777
-------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 217,963 $ 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 39 Wks. Ended 39 Wks. Ended
Apr. 24, 2004 Apr. 26, 2003 Apr. 24, 2004 Apr. 26, 2003
Sales $ 229,531 $ 221,450 $ 698,473 $ 671,899
Cost of sales 170,824 166,281 520,513 504,806
--------- --------- --------- ---------
Gross profit 58,707 55,169 177,960 167,093
Operating and
administrative
expense 51,175 49,058 154,081 145,648
Depreciation and
amortization 2,389 2,231 6,868 6,690
--------- --------- --------- ---------
Operating income 5,143 3,880 17,011 14,755
Income from
partnerships --- --- --- 1,639
Interest expense, net 493 698 1,707 2,321
--------- --------- --------- ---------
Income before
income taxes 4,650 3,182 15,304 14,073
Income taxes 1,906 1,285 6,390 5,685
--------- --------- --------- ---------
Net income $ 2,744 $ 1,897 $ 8,914 $ 8,388
========= ========= ========= =========
Net income
per share:
Basic $ .88 $ .61 $ 2.87 $ 2.72
Diluted $ .87 $ .60 $ 2.83 $ 2.66
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 24,2004 April 26,2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,914 $ 8,388
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 6,868 6,690
Deferred taxes 990 750
Provision to value inventories at LIFO 1,075 450
Tax benefit from exercise of stock options 287 71
Non-cash stock compensation 63 ---
Changes in assets and liabilities:
(Increase) decrease in merchandise inventories ( 211) 2,214
(Increase) decrease in patronage dividend receivable 874 ( 31)
(Increase) decrease in other current assets ( 447) 1,356
(Increase) in other assets ( 161) ( 163)
(Decrease) in accounts payable to related party ( 3,012) ( 1,624)
Increase (decrease) in accounts payable and
accrued expenses 732 ( 1,802)
Increase in other liabilities 403 353
--------- ---------
Net cash provided by operating activities 16,375 16,652
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in note receivable from related party ( 20,148) -----
Capital expenditures ( 8,954) ( 7,604)
Proceeds from disposal of assets ----- 4,006
--------- ---------
Net cash used in investing activities ( 29,102) ( 3,598)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 408 125
Principal payments of long-term debt ( 6,875) ( 2,319)
Dividends ( 357) -----
--------- ---------
Net cash used in financing activites ( 6,824) ( 2,194)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENT ( 19,551) 10,860
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 48,500 33,770
---------- ---------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $ 28,949 $ 44,630
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH
PAYMENTS FOR:
Interest $ 2,603 $ 3,207
Income taxes $ 3,654 $ 1,925
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 April 24, 2004 and the consolidated results of operations and
cash flows for the periods ended April 24, 2004 and April 26, 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 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 April 24, 2004 are not
necessarily indicative of the results to be expected for the full year.
3. At both April 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 $10,787,000 and $9,712,000 higher than reported at April 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 39 Weeks Ended
4/24/04 4/26/03 4/24/04 4/26/03
Weighted Average Shares Outstanding - Basic 3,120,419 3,085,650 3,101,492 3,084,059
Dilutive Effect of Employee Stock Options 42,022 62,146 46,750 66,505
--------- --------- --------- ---------
Weighted Average Shares Outstanding - Diluted 3,162,441 3,147,796 3,148,242 3,150,564
========= ========= ========= =========
5. The note receivable from related party of $20,148,000 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. At April 24, 2004, cash and
cash equivalents included $16,639,000 of demand deposits invested at Wakefern
earning interest at prime less 2.5%, or overnight money rates.
6. Comprehensive income was $2,744,000 and $8,914,000 for the quarter and
nine-month periods ended April 24, 2004, and $1,897,000 and $8,388,000 for the
quarter and nine-month periods ended April 26, 2003.
7. The fair value of each of the 6,000 options granted in 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%
8. The Company sponsors three defined benefit pension plans covering
administrative personnel and members of two unions. Net periodic pension
costs for the three plans includes the following components:
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended 4/24/04 Ended 4/26/03 Ended 4/24/04 Ended 4/26/03
Service cost $ 195,000 $ 196,000 $ 584,000 $ 589,000
Interest cost on projected
benefit obligations 250,000 233,000 750,000 699,000
Expected return on
plan assets (174,000) (181,000) (523,000) (543,000)
Net amortization and
deferral 61,000 ( 47,000) 184,000 (142,000)
---------- ---------- ---------- ----------
Net periodic pension cost $ 332,000 $ 201,000 $ 995,000 $ 603,000
========== ========== ========== ==========
As of April 24, 2004, the Company has contributed $1,335,000 to its
pension plans in fiscal 2004. The Company expects to contribute an additional
$274,000 in the fourth quarter of fiscal 2004 to fund its pension plans.
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 nation's 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 $229,531,000 in the third quarter of fiscal 2004. Total sales
and same store sales both increased 3.6% compared to the third quarter of the
prior year. Sales were $698,473,000 for the nine-month period of fiscal 2004,
an increase of 4.0% from the prior year. Sales increased due to continued
improvement in the two stores opened in fiscal 2002, increased sales in stores
remodeled in fiscal 2003 and increases in retail prices in certain categories
resulting from inflation in fiscal 2004. In addition, sales in fiscal 2004
benefited from comparison to fiscal 2003 periods 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 25.5%,
respectively, in the third quarter and nine-month periods of fiscal 2004
compared with 24.9% in both the third quarter and nine-month period of the
prior year. As a percentage of sales, gross profit in the third quarter
increased compared to the prior year primarily due to an increased estimate of
patronage dividends, improved gross margins in several departments, improved
product mix and reduced Wakefern assessment charges. These improvements were
partially offset by increased LIFO charges and higher promotional spending in
the third quarter of fiscal 2004. As a percentage of sales, gross profit for
the nine-month period increased from the prior year primarily due to a higher
estimate of patronage dividends, improved gross margins in several departments,
reduced Wakefern assessment charges and lower promotional spending. These
improvements were partially offset by increased LIFO charges in the current
nine-month period.
Operating and administrative expenses as a percentage of sales increased
to 22.3% and 22.1%, respectively, in the third quarter and nine-month periods
of fiscal 2004 compared with 22.2% and 21.7%, respectively, in the
corresponding prior year periods. As a percentage of sales, fringe benefits
costs, primarily contributions to employee health and pension plans, utility
costs and marketing costs increased in the fiscal 2004 periods compared to the
prior fiscal year periods. As a percentage of sales, payroll costs declined
in the fiscal 2004 periods compared to the prior fiscal year periods.
Depreciation and amortization expense increased in the third quarter and
nine-month periods of fiscal 2004 compared to the corresponding periods of the
prior year due to additional depreciation on fixed assets placed in service in
fiscal 2004 and 2003.
Interest expense (net) decreased in the third quarter and nine-month
period of fiscal 2004 compared to the corresponding periods of the prior year
due to reduced borrowing levels in the current fiscal year and increased
interest income from higher rates received on excess cash invested at Wakefern.
In addition, the prior fiscal year included interest expense from a capital
lease disposed of in the third quarter of fiscal 2003.
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
two 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 was 41.0% and 41.8%, respectively, for the
third quarter and nine-month period of fiscal 2004 compared to 40.4% in both
of the corresponding periods of the prior year. The increase in the nine-month
period is due to completed tax audits of previous fiscal years.
Net income was $2,744,000 in the third quarter of fiscal 2004, an increase
of 45% from the third quarter of the prior fiscal year. This increase is
attributable to strong sales growth and increased gross profit percentages,
partially offset by a slightly 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 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 April 24, 2004, there have been no
material changes to any of the critical accounting policies contained therein.
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.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $16,375,000 for the
nine-month period ended April 24, 2004 compared with $16,652,000 for the
nine-month period ended April 26, 2003. Although net cash provided by
operating activities was similar, fiscal 2004 included greater net income,
LIFO charges, and patronage dividends received, while fiscal 2003 included
reduced inventories and reduced tax receivables, partially offset by larger
decreases in accounts payable to related party and accounts payable and accrued
expenses.
During the first nine months of fiscal 2004, the Company used $16,375,000
of operating cash flow and $19,551,000 of cash on hand primarily to fund
capital expenditures of $8,954,000, to make debt payments of $6,875,000 and to
invest $20,148,000 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 $29,924,000 at April 24, 2004 compared to $28,244,000
at July 26, 2003. The working capital ratio was 1.51 to one at April 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 payments to Wakefern
and other suppliers are due.
The Company has budgeted approximately $13,000,000 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 April 24, 2004 and operating cash flow. The
Company has available a $15 million (none outstanding at April 24, 2004)
unsecured revolving credit line, which expires September 16, 2004. The Company
expects to replace this credit facility prior to expiration.
There have been no substantial changes as of April 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 the
nature of the transactions with these related parties during the nine months of
fiscal 2004, except that the Company invested $20,148,000 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 (the "FASB")
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, and have been included herein.
In December 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003), "Consolidation of Variable Interest Entities", which addresses
how a business enterprise should evaluate whether it has a controlling
financial interest in an entity through means other than voting rights and
accordingly should consolidate the entity. The Company adopted FASB
Interpretation No. 46 effective April 24, 2004, which did not have any impact
on the Company.
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 April 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% (4.51% at April 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 repayment of the fixed rate obligation it hedges. At
April 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 April 24, 2004, would result in an annual increase in
interest expense and a corresponding reduction in cash flow of approximately
$85,714.
At April 24, 2004, the Company had demand deposits of $16,639,000 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
April 24, 2004, the Company had a $20,148,000 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 third 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 10.6 - Employment agreement dated January 1,2004
between the Company and Kevin Begley
Exhibit 28(a) - Press Release dated May 28, 2004.
Exhibit 28(b) - Second Quarter Report to Shareholders dated
March 13, 2004.
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: June 1, 2004 /s/ James Sumas
James Sumas
(Chief Executive Officer)
Date: June 1, 2004 /s/ Kevin R. Begley
Kevin R. Begley
(Chief Financial Officer)
Exhibit 28(a)
VILLAGE SUPER MARKET, INC.REPORTS RESULTS
FOR THE QUARTER AND NINE MONTHS ENDED APRIL 24, 2004
Contact: Kevin Begley, CFO
(973) 467-2200 - Ext. 220
Kevin.Begley@wakefern.com
Springfield, New Jersey - May 28, 2004 - Village Super Market, Inc.
(NSD-VLGEA) today reported its results of operations for the third quarter
ended April 24, 2004.
Net income was $2,744,000 ($.87 per diluted share) in the third quarter
of fiscal 2004, an increase of 45% from the third quarter of the prior year.
Net income in the third quarter increased primarily due to strong sales growth
and increased gross profit percentages, partially offset by a slightly higher
operating expense percentage.
Sales were $229,531,000 in the third quarter of fiscal 2004. Total sales
and same store sales both increased 3.6% compared to the third quarter of the
prior year. Sales increased due to continued improvement in the two stores
opened in fiscal 2002, higher sales in stores remodeled in fiscal 2003 and
increased inflation. In addition, sales in the third quarter of fiscal 2004
benefited from comparison to a year ago period that included the impact of a
substantial number of store openings by competitors, higher levels of
promotional activity and a softer economy.
Net income for the nine-month period of fiscal 2004 was $8,914,000 ($2.83
per diluted share) an increase of 6% from the prior year. Results for fiscal
2003 included $967,000 (after-tax) of income received from two partnerships.
Excluding the income received from these partnerships in fiscal 2003, net
income for the nine-month period of fiscal 2004 would have increased 20% from
fiscal 2003. Sales for the nine-month period of fiscal 2004 were $698,473,000,
an increase of 4.0% from the prior year.
Village Super Market operates a chain of 23 supermarkets under the
ShopRite name in New Jersey and eastern Pennsylvania.
All statements, other than statements of historical fact, included in this
Press Release 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)
(Unaudited)
13 Wks. Ended 13 Wks. Ended 39 Wks. Ended 39 Wks. Ended
Apr. 24, 2004 Apr. 26, 2003 Apr. 24, 2004 Apr. 26, 2003
Sales $ 229,531 $ 221,450 $ 698,473 $ 671,899
Cost of sales 170,824 166,281 520,513 504,806
---------- ---------- ---------- ----------
Gross profit 58,707 55,169 177,960 167,093
Operating and
administrative
expense 51,175 49,058 154,081 145,648
Depreciation and
amortization 2,389 2,231 6,868 6,690
---------- ---------- ---------- ----------
Operating income 5,143 3,880 17,011 14,755
Interest expense 493 698 1,707 2,321
Income from
partnerships ---- ---- ---- 1,639
---------- ---------- ---------- ----------
Income before
income taxes 4,650 3,182 15,304 14,073
Income taxes 1,906 1,285 6,390 5,685
---------- ---------- ---------- ----------
Net income $ 2,744 $ 1,897 $ 8,914 $ 8,388
========== ========== ========== ==========
Net income
per share:
Basic $ .88 $ .61 $ 2.87 $ 2.72
Diluted $ .87 $ .60 $ 2.83 $ 2.66
Gross profit as a
% of sales 25.6% 24.9% 25.5% 24.9%
Operating and admin.
expense as a
% of sales 22.3% 22.2% 22.1% 21.7%
Exhibit 28(b)
To our Shareholders:
Net income was $3,651,000 ($1.16 per diluted share) in the second quarter
of fiscal 2004, a decrease of 10% from the second quarter of the prior year.
Results for the second quarter of fiscal 2003 included $967,000 (after-tax) of
income received from two partnerships. Excluding this partnership income, net
income in the second quarter of fiscal 2004 increased 19% from the second
quarter of fiscal 2003. Net income in the second quarter of fiscal 2004
increased primarily due to strong sales growth, increased gross profit
percentages and lower interest expense, partially offset by higher operating
expense percentages.
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 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 the second quarter of fiscal 2004 benefited from
comparison to a year ago period that included the impact of a substantial
number of store openings by competitors, higher levels of promotional activity
and a softer economy.
Net income for the six-month period of fiscal 2004 was $6,170,000 ($1.96
per diluted share), a decrease of 5% from the prior year. Excluding the income
received from the partnership described above, net income increased 12% in the
six-month period. Sales for the six-month period of fiscal 2004 were
$468,943,000, an increase of 4.1% from the prior year.
Village Super Market operates a chain of 23 supermarkets under the
ShopRite name in New Jersey and eastern Pennsylvania.
Respectfully,
Perry Sumas James Sumas
President Chairman of the Board
March 13, 2004
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)
(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 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
Gross profit as a
% of sales 25.6% 24.7% 25.4% 24.8%
Operating and admin.
expense as a
% of sales 21.8% 21.2% 21.9% 21.4%
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: June 1, 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: June 1, 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 April 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
June 1, 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 April 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
June 1, 2004