Business Context and Reporting Period
Company: Village Super Market, Inc.
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended July 29, 1995
Business Overview: The Company operates 21 ShopRite supermarkets and 2 "Village Market" stores primarily in New Jersey, with locations in Pennsylvania. It is the second-largest member of Wakefern Food Corporation, a retailer-owned cooperative that provides purchasing, distribution, and advertising services. The Company focuses on high-volume sales through low pricing and has shifted its portfolio toward larger "superstores" (19 of 21 stores) which feature higher-margin departments like pharmacies and bakeries.
Key Financial Metrics
Note: Specific revenue, net income, cash flow, and margin figures are incorporated by reference from the Company's Annual Report to Shareholders and are not explicitly stated in the text of this Form 10-K.
- Capital Expenditures: The Company budgeted $8,000,000 for capital expenditures in fiscal 1996. Actual additions to property, equipment, and fixtures for fiscal 1995 totaled approximately $6.59 million.
- Property Assets: Total property, equipment, and fixtures at cost were $131.87 million as of July 29, 1995. Accumulated depreciation was $61.96 million.
- Lease Obligations: Annual rent for leased facilities (including capitalized leases) was approximately $5.7 million for the year ended July 29, 1995.
- Market Capitalization: As of October 6, 1995, the aggregate market value of Class A common stock held by non-affiliates was approximately $7.09 million, and Class B was approximately $1.06 million.
- Outstanding Shares (Oct 24, 1995): 1,315,800 Class A shares and 1,594,076 Class B shares.
Material Changes and Operational Updates
- Store Portfolio: The number of superstores increased to 19 (from 18 in 1994), representing 88% of selling square footage (up from 82%).
- Store Closures and Conversions: Five stores (Orange, Maplewood, Kingston, Morristown, Easton) were closed since December 1991. Two stores were converted to a "Village Market" format to reduce costs in lower-volume locations.
- Expansion Delays: The Company has been unable to meet its goal of opening one new superstore annually due to governmental regulations (sewage moratoriums, environmental cleanup) and a lack of real estate developer activity.
- Product Mix: Sales percentages remained relatively stable, with Groceries at 44.1%, Dairy/Frozen at 15.6%, and Non-Foods at 9.5% for fiscal 1995.
Guidance, Outlook, and Risks
Management Outlook: The Company plans to spend $8 million in fiscal 1996 on capital expenditures, primarily for the expansion/remodel of the Absecon store and the beginning of the Livingston store expansion. The Company continues to seek acquisitions if appropriate opportunities arise.
Key Risks and Contingencies:
- Wakefern Dependency: The Company is heavily reliant on Wakefern Food Corporation. It must purchase a minimum of 85% of its requirements from Wakefern. A material change in this relationship or Wakefern's operations could adversely impact the business.
- Change of Control Restrictions: The Wakefern Stockholder Agreement makes unapproved changes in control or the sale of stores financially prohibitive, requiring payment of profit contribution shortfalls unless a "qualified successor" is found.
- Capital Contributions: The Company is required to invest approximately $820,000 in Wakefern over the next three years based on store count and sales volume.
- Competition: The industry is highly competitive with narrow margins. Competitors include Pathmark, A&P, and Foodtown, many of whom have greater financial resources.
- Labor: Approximately 86% of employees are covered by collective bargaining agreements. One contract expires in fiscal 1996.
Investor Verification Checklist
- Verify specific revenue, net income, and cash flow figures in the 1995 Annual Report to Shareholders, as these are incorporated by reference and not detailed in this 10-K text.
- Review the 1995 Definitive Proxy Statement for details on executive compensation, director ownership, and related party transactions.
- Assess the impact of the Wakefern Stockholder Agreement on the Company's ability to sell assets or undergo a change in control.
- Monitor the status of the labor contract expiring in fiscal 1996 and potential wage increases.
- Confirm the progress of the $8 million capital expenditure plan for fiscal 1996, specifically the Absecon and Livingston store projects.