VILLAGE SUPER MARKET INC - Annual Report: 2008 (Form 10-K)
UNITED
STATES
SECURITIES
& EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
FORM
10-K
(Mark
One)
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[x]
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Annual
Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act
of 1934.
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For the
fiscal year ended: July 26, 2008.
[ ] Transition
Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange
Act of 1934 (Fee Required) for the transition period
from to .
COMMISSION
FILE NUMBER: 0-33360
VILLAGE
SUPER MARKET, INC.
(Exact
name of registrant as specified in its charter)
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NEW
JERSEY
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22-1576170
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(State or other jurisdiction of incorporation or
organization)
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(I.
R. S. Employer Identification
No.)
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733 MOUNTAIN AVENUE,
SPRINGFIELD, NEW JERSEY
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07081
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(Address
of principal executive offices)
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(Zip
Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (973)467-2200
Securities
registered pursuant to Section 12(b) of the Act:
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Class A common stock,
no par value
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The NASDAQ Stock
Market
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(Title
of Class)
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(Name
of exchange on which registered)
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Securities
registered pursuant to Section 12(g) of the Act: NONE
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes__ No X .
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section15
(d) of the Act. Yes __ No X .
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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
Indicate by check mark whether the
Registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12-b2 of the Exchange Act.
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Large
accelerated filer □
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Accelerated
filer S
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Non-accelerated
filer □ (Do not check if a smaller
reporting company)
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Smaller
reporting company □
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Indicate by check mark whether the
registrant is a shell company. Yes __ No X.
The
aggregate market value of the Class A common stock of Village Super Market, Inc.
held by non-affiliates was approximately $110.9 million and the aggregate market
value of the Class B common stock held by non-affiliates was approximately $10.3
million based upon the closing price of the Class A shares on the NASDAQ on
January 26, 2008, the last business day of the second fiscal
quarter. There are no other classes of voting stock
outstanding.
Indicate
the number of shares outstanding of each of the registrant's classes of common
stock, as of latest practicable date.
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Outstanding
at
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Class
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October 7,
2008
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Class
A common stock, no par value
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3,440,582
Shares
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Class
B common stock, no par value
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3,188,152
Shares
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DOCUMENTS INCORPORATED BY
REFERENCE
Information
contained in the 2008 Annual Report to Shareholders and the 2008 definitive
Proxy Statement to be filed with the Commission and delivered to security
holders in connection with the Annual Meeting scheduled to be held on December
5, 2008 are incorporated by reference into this Form 10-K at Part II, Items 5,
6, 7, 7A, and 8 and Part III.
PART I
FORWARD-LOOKING
STATEMENTS
All
statements, other than statements of historical fact, included in this Form 10-K
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 the results expressed, suggested or implied by such
forward-looking statements. The Company undertakes no obligation to
update forward-looking statements and 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; the success of operating initiatives; consumer spending
patterns; the impact of higher energy prices; increased cost of goods sold,
including increased costs from the Company’s principal supplier, Wakefern; the
results of litigation; the results of tax examinations; the results of union
contract negotiations; competitive store openings; the rate of return on pension
assets; and other factors detailed herein under Risk Factors.
2
ITEM
I. BUSINESS
(All dollar amounts in this report are
in thousands, except per square foot data).
GENERAL
Village
Super Market, Inc. (the “Company” or “Village”) was founded in
1937. At July 26, 2008, Village operated a chain of twenty-five
ShopRite supermarkets, seventeen of which are located in northern New Jersey,
one in northeastern Pennsylvania and seven in southern New
Jersey. The Company is a member of Wakefern Food Corporation
("Wakefern"), the nation's largest retailer-owned food cooperative and owner of
the ShopRite name. This relationship provides Village many of the
economies of scale in purchasing, distribution, private label products, advanced
retail technology and advertising associated with chains of greater size and
geographic coverage.
Village seeks to generate high sales
volume by offering a wide variety of high quality products at consistently low
prices. During fiscal 2008, sales per store were $46,990 and sales
per selling square foot were $1,068. The Company gives ongoing
attention to the décor and format of its stores and tailors each store's product
mix to the preferences of the local community. Village concentrates
on the development of superstores.
On August 11, 2007, Village acquired
the store fixtures and lease of a location in Galloway Township, New Jersey from
Wakefern for $3,500. This store had previously been operated by a
competitor. The Company began operating a pharmacy at this location
on August 11, 2007. The remainder of this 55,000 sq. ft. store opened
on October 3 after the completion of an extensive remodel. Village
opened a new 67,000 sq. ft. store in Franklin, New Jersey on November 7,
2007. Below is a summary of the range of store sizes at
July 26, 2008:
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Total Square
Feet
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Number of
Stores
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Greater
than 60,000
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10
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50,001
to 60,000
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6
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40,000
to 50,000
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7
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Less
than 40,000
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2
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|||
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Total
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25
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3
These
larger store sizes enable the Company’s superstores to provide a “one-stop”
shopping experience and to feature expanded higher margin specialty departments
such as home meal replacement, an on-site bakery, an expanded delicatessen
including prepared foods, a variety of natural and organic foods, ethnic and
international foods and a fresh seafood section. Superstores also
offer an expanded selection of non-food items such as cut flowers, health and
beauty aids, greeting cards, small appliances, photo processing and in most
cases, a pharmacy. Recently remodeled and new superstores
emphasize a Power Alley, which features high margin, fresh convenience offerings
such as salad bars, bakery and Bistro Street home meal replacement in an area
within the store that provides quick customer entry and exit for those customers
shopping for today's lunch or dinner. The following table shows the
percentage of the Company's sales allocable to various product categories during
each of the periods indicated, as well as the number of superstores and
percentage of selling square feet allocable to these stores during each of these
periods:
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Product
Categories
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Fiscal Year Ended In
July_
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|||||||||||
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2008
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2007
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2006
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Groceries
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38.5 | % | 38.6 | % | 38.7 | % | ||||||
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Dairy
and Frozen
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17.2 | 16.5 | 16.4 | |||||||||
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Meats
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10.0 | 10.0 | 10.0 | |||||||||
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Non-Foods
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8.5 | 8.8 | 8.9 | |||||||||
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Produce
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11.4 | 11.5 | 11.4 | |||||||||
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Appetizers
and prepared food
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5.5 | 5.4 | 5.3 | |||||||||
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Seafood
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2.3 | 2.3 | 2.3 | |||||||||
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Pharmacy
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4.8 | 5.1 | 5.2 | |||||||||
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Bakery
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1.8 | 1.8 | 1.8 | |||||||||
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Other
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----- | ----- | ----- | |||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | |||||||
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Number
of superstores
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23 | 21 | 21 | |||||||||
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Selling
square feet represented by superstores
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95 | % | 95 | % | 95 | % | ||||||
A variety
of factors affect the profitability of each of the Company's stores, including
local competitors, size, access and parking, lease terms, management
supervision, and the strength of the ShopRite trademark in the local
community. Village continually evaluates individual stores to
determine if they should be closed.
DEVELOPMENT AND
EXPANSION
The
Company has an ongoing program to upgrade and expand its supermarket
chain. This program has included major store remodelings as well as
the opening or acquisition of additional stores. When remodeling,
Village has sought, whenever possible, to increase the amount of selling space
in its stores.
4
The
Company has budgeted approximately $30 million for capital expenditures in
fiscal 2009. Planned expenditures include construction costs and
equipment for a replacement store in Washington, New Jersey and a new store in
Marmora, New Jersey. Construction of the Washington replacement store
was delayed as the approvals previously obtained were contested by a third
party. Construction began in September 2008 with an expected opening in spring
2009. We believe certain conditions in the lease for the current
store in Washington have been triggered extending the lease term until at least
January 31, 2009, which is before the expected completion of the replacement
store. The Company is currently negotiating to further extend the
lease term to eliminate the possibility of a period of time between the closing
of the current Washington store and the opening of the replacement
store.
In fiscal
2008, Village completed the construction of the Franklin store, which opened on
November 7, 2007, and acquired and remodeled a store in Galloway, New Jersey,
which opened on August 11, 2007.
In fiscal
2007, Village completed the Rio Grande remodel and several small remodels, and
began the construction of a new, leased store in Franklin, New
Jersey. In fiscal 2006, the Company completed the expansion and
remodel of the Springfield store, began a major remodel of the Rio Grande store,
and completed smaller remodels of the Elizabeth and Chester stores.
In fiscal
2005, the Company opened an 80,000 square foot replacement store in Somers
Point, completed an expansion and remodel of the Bernardsville store, and began
the expansion and remodel of the Springfield store. In fiscal 2004,
the Company began the expansion and remodel of the Bernardsville store and the
construction of the replacement store in Somers Point.
The
general difficulty in developing retail properties in the Company's primary
trading area has prevented the Company from opening the desired number of new
stores. Additional store remodelings and sites for new stores are in
various stages of development. Village will also consider additional
acquisitions should appropriate opportunities arise.
WAKEFERN FOOD
CORPORATION
The
Company is the second largest member of Wakefern and owns 15% of Wakefern’s
outstanding stock as of July 26, 2008. Wakefern, which was organized
in 1946, is the nation’s largest retailer-owned food
cooperative. Wakefern and its 44 shareholder members operate 242
supermarkets and other retail formats, including 61 stores operated by
Wakefern. Only Wakefern and its members are entitled to use the
ShopRite name and trademark, and to participate in ShopRite advertising and
promotional programs.
The
principal benefits to the Company from its relationship with Wakefern are the
use of the ShopRite name and trademark, volume purchasing, ShopRite private
label products, distribution and warehousing economies of scale, ShopRite
advertising and promotional programs, including the ShopRite Price Plus card and
a co-branded credit card, and the development of advanced retail
technology. The Company believes that the ShopRite name is widely
recognized by its customers and is a factor in their decisions about where to
shop. ShopRite private label products accounted for approximately 13.5% of sales
in fiscal 2008.
5
Wakefern
distributes as a "patronage dividend" to each of its stockholders a share of its
earnings in proportion to the dollar volume of purchases by the stockholder from
Wakefern during each fiscal year.
While
Wakefern has a substantial professional staff, it operates as a member owned
cooperative. Executives of most members make contributions of time to
the business of Wakefern. Senior executives of the Company spend a
significant amount of their time working on various Wakefern committees, which
oversee and direct Wakefern purchasing, merchandising and other
programs. James Sumas, the Company’s Chief Executive Officer, is Vice
Chairman of Wakefern, and a member of the Wakefern Board of
Directors.
Most of
the Company's advertising is developed and placed by Wakefern's professional
advertising staff. Wakefern is responsible for all television, radio
and major newspaper advertisements. Wakefern bills its members using various
formulas which allocate advertising costs in accordance with the estimated
proportional benefits to each member from such advertising. The
Company also places Wakefern developed materials with local
newspapers. In addition, Wakefern and its affiliates provide the
Company with other services including liability and property insurance,
supplies, equipment purchasing, coupon processing, certain financial accounting
applications, and retail technology support.
Wakefern
operates warehouses and distribution facilities in Elizabeth, Keasbey, Dayton
and Jamesburg, New Jersey and Gouldsboro and Breinigsville,
Pennsylvania. The Company and all other members of Wakefern are
parties to the Wakefern Stockholder’s Agreement which provides for certain
commitments by, and restrictions on, all shareholders of
Wakefern. This agreement extends until ten years from the date that
stockholders representing 75% of Wakefern sales notify Wakefern that those
stockholders request the Wakefern Stockholder Agreement be
terminated. Each member is obligated to purchase from Wakefern a
minimum of 85% of its requirements for products offered by
Wakefern. If this purchase obligation is not met, the member is
required to pay Wakefern's profit contribution shortfall attributable to this
failure. The Company fulfilled this obligation in fiscal 2008, 2007
and 2006. This agreement also requires that in the event of
unapproved changes in control of the Company or a sale of the Company or of
individual Company stores, except to a qualified successor, the Company in such
cases must pay Wakefern an amount equal to the annual profit contribution
shortfall attributable to the sale of store or change in control. No
payments are required if the volume lost by a shareholder as a result of the
sale of a store is replaced by such shareholder by increased volume in existing
or new stores. A "qualified successor" must be, or agree to become, a
member of Wakefern, and may not own or operate any supermarkets, other than
ShopRite supermarkets, in the states of New York, New Jersey, Pennsylvania,
Delaware, Maryland, Virginia, Connecticut, Massachusetts, Rhode Island, Vermont,
New Hampshire, Maine or the District of Columbia or own or operate more than
twenty-five non-ShopRite supermarkets in any other locations in the United
States.
6
Wakefern,
under circumstances specified in its bylaws, may refuse to sell merchandise to,
and may repurchase the Wakefern stock of, any member. Such
circumstances include certain unapproved transfers by a member of its
supermarket business or its capital stock in Wakefern, unapproved acquisition by
a member of certain supermarket or grocery wholesale supply businesses, the
material breach by a member of any provision of the bylaws of Wakefern or any
agreement with Wakefern, or a determination by Wakefern that the continued
supplying of merchandise or services to such member would adversely affect
Wakefern.
Any
material change in Wakefern's method of operation or a termination or material
modification of the Company's relationship with Wakefern following termination
of the above agreements, or otherwise, might have an adverse impact on the
conduct of the Company's business and could involve additional expense for the
Company. The failure of any Wakefern member to fulfill its
obligations under these agreements or a member's insolvency or withdrawal from
Wakefern could result in increased costs to remaining members.
Wakefern
does not prescribe geographical franchise areas to its members. The
specific locations at which the Company, other members of Wakefern, or Wakefern
itself, may open new units under the ShopRite name are, however, subject to the
approval of Wakefern's Site Development Committee. This committee is
composed of persons who are not employees or members of
Wakefern. Committee decisions to deny a site application may be
appealed to the Wakefern Board of Directors. Wakefern assists its
members in their site selection by providing appropriate demographic data,
volume projections and estimates of the impact of the proposed store on existing
member supermarkets in the area.
Each of
Wakefern's members is required to make capital contributions to Wakefern based
on the number of stores operated by that member and the purchases generated by
those stores. As additional stores are opened or acquired by a
member, additional capital must be contributed by it to Wakefern. The
Company’s investment in Wakefern and affiliates was $18,291 at July 26,
2008. The total amount of debt outstanding from all capital pledges
to Wakefern is $1,536 at July 26, 2008. The maximum per store capital
contribution increased from $675 to $700 in fiscal 2008, resulting in an
additional $500 capital pledge, which was paid in fiscal 2008.
As
required by the Wakefern bylaws, the Company’s investment in Wakefern is pledged
to Wakefern to secure the Company’s obligation to Wakefern. In
addition, five members of the Sumas family have guaranteed the Company’s
obligations to Wakefern. These personal guarantees are required of
any 5% shareholder of the Company who is active in the operation of the
Company. Wakefern does not own any securities of the Company or its
subsidiaries. The Company’s investment in Wakefern entitles the
Company to enough votes to elect one member to the Wakefern Board of Directors
due to cumulative voting rights.
7
TECHNOLOGY
The
Company considers automation and information technology important to its
operations and competitive position. All stores utilize sophisticated
point of sale systems. Electronic payment options are offered at all
checkout locations. We plan to replace these point of sale systems
beginning in fiscal 2009. We recently upgraded our communication
network, which is used for reliable, high speed processing of electronic
payments and transmission of data.
The
Company’s commitment to advanced point of sale and communication systems enables
it to participate in Price Plus, ShopRite’s preferred customer
program. Customers receive electronic discounts by presenting a
scannable Price Plus card. This technology also enables Village to
offer continuity programs and focus on target marketing
initiatives.
The
Company began installing self-checkout systems in fiscal
2002. Currently, fifteen stores use these systems to provide improved
customer service, especially during peak periods, and reduce operating
costs. Additional locations are planned for fiscal
2009. In fiscal 2007, we installed RFID readers in all checkout lanes
to enable contactless payment options for customers to quicken checkout
times.
Village
utilizes a computer generated ordering system, which is designed to reduce
inventory levels and out of stock conditions, enhance shelf space utilization,
and reduce labor costs. The Company utilizes a direct store delivery
system, consisting of personal computers and advanced hand held scanners, for
product not purchased through Wakefern to provide equivalent cost and retail
price control over these products. In fiscal 2007, both of these
systems were replaced with upgraded versions.
Village
seeks to design its stores to use energy efficiently, including recycling waste
heat generated by refrigeration equipment for heating and other
purposes. Most stores utilize computerized energy management
systems. Certain in-store department records are computerized,
including the records of all pharmacy departments. In all stores,
meat, seafood, delicatessen, and bakery prices are maintained on computer for
automatic weighing and pricing.
The
Company has installed computer based training systems in all stores to assist in
the training of all new cashiers, produce and bakery
associates. Village replaced the time and attendance system and labor
scheduling system in fiscal 2006 to improve reporting, work flow and system
interfaces, and reduce labor.
Village
utilizes digital surveillance systems, which are integrated with the cashier
monitoring systems, in all stores to aid shrink reduction, increase productivity
and assist in accident investigations.
The
Company utilizes a division of Wakefern for data processing services, including
financial accounting support.
Wakefern
and Village have responded to customers increased use of the internet by
creating shoprite.com to provide weekly advertising and other shopping
information. In addition, on-line shopping is available in three
store locations with store pick-up and delivery options.
8
COMPETITION
The
supermarket industry is highly competitive. The Company competes
directly with multiple retail formats, including national, regional and local
supermarket chains as well as warehouse clubs, supercenters, drug stores,
discount general merchandise stores, fast food chains, dollar stores and
convenience stores. Village competes by using low pricing, superior
customer service, and a broad range of consistently available quality products,
including ShopRite private labeled products. The ShopRite Price Plus
card and the co-branded ShopRite credit card also strengthen customer
loyalty.
Some of
the Company's principal competitors include Pathmark, A&P, Stop & Shop,
Acme, Kings, Wal-Mart, Wegmans and Foodtown. Many of these
competitors have financial resources substantially greater than those of the
Company, and some are non-union.
LABOR
As of
October 1, 2008, the Company employed approximately 4,700 persons with
approximately 70% working part-time. Approximately 91% of the
Company’s employees are covered by collective bargaining agreements. A contract
with a union representing employees in one store expired in June
2007. Negotiations with this union continue as the store operates
under the expired contract. Contracts with the Company’s other five
unions expire between April 2009 and March 2012. Most of the
Company’s competitors in New Jersey are similarly unionized.
AVAILABLE
INFORMATION
As a
member of the Wakefern cooperative, Village relies upon our customer focused
website, www.shoprite.com, for
interaction with customers and prospective employees. This website is
maintained by Wakefern for the benefit of all ShopRite supermarkets, and
therefore, does not contain any financial information related to the
Company.
The
Company will provide paper copies of the annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and press releases free of
charge upon request to any shareholder. In addition, electronic
copies of these filings can be obtained at www.sec.gov.
REGULATORY
ENVIRONMENT
The Company’s business requires various
licenses and the registration of facilities with state and federal health and
drug regulatory agencies. These licenses and registration
requirements obligate the Company to observe certain rules and regulations, and
a violation of these rules and regulations could result in a suspension or
revocation of licenses or registrations. In addition, most licenses
require periodic renewals. The Company has not experienced material
difficulties with respect to obtaining or retaining licenses and
registrations. In addition, the Company is subject to the
requirements of the Sarbanes-Oxley Act of 2002.
9
ITEM
1A. RISK
FACTORS
COMPETITIVE
ENVIRONMENT
The
supermarket business is highly competitive and characterized by narrow profit
margins. Results of operations therefore may be materially adversely
impacted by competitive pricing and promotional programs and competitor store
openings. Village competes with national and regional supermarkets,
local supermarkets, warehouse club stores, supercenters, drug stores,
convenience stores, dollar stores, discount merchandisers, restaurants and other
local retailers in the market areas we serve. Competition with these
outlets is based on price, store location, promotion, product assortment,
quality and service. Some of these competitors may have greater
financial resources, lower merchandise acquisition cost and lower operating
expenses than we do.
GEOGRAPHIC
CONCENTRATION
The
Company’s stores are concentrated in New Jersey, with one store in northeastern
Pennsylvania. We are vulnerable to economic downturns in New Jersey
in addition to those that may affect the country as a whole. Economic
conditions such as interest rates, energy costs and unemployment rates may
adversely affect our sales. Further, since our store base is
concentrated in densely populated metropolitan areas, opportunities for future
store expansion may be limited, which may adversely affect our business and
results of operations.
WAKEFERN
RELATIONSHIP
Village
purchases substantially all of its merchandise from Wakefern. In
addition, Wakefern provides the Company with support services in numerous areas
including supplies, advertising, liability and property insurance, technology
support and other store services. Further, Village receives patronage
dividends and other product incentives from Wakefern.
Any
material change in Wakefern’s method of operation or a termination or material
modification of Village’s relationship with Wakefern could have an adverse
impact on the conduct of the Company’s business and could involve additional
expense for Village. The failure of any Wakefern member to fulfill
its obligations to Wakefern or a member’s insolvency or withdrawal from Wakefern
could result in increased costs to the Company. Additionally, an
adverse change in Wakefern’s results of operations could have an adverse affect
on Village’s results of operations.
10
LABOR
RELATIONS
A
significant majority of our employees are covered by collective bargaining
agreements with unions, and our relationship with those unions, including any
work stoppages, could have an adverse impact on our financial
results.
In future
negotiations with labor unions, we expect that rising health care and pension
costs, among other issues, will continue to be important topics for
negotiation. Upon the expiration of our collective bargaining
agreements, work stoppages by the affected workers could occur if we are unable
to negotiate acceptable contracts with labor unions. This could
significantly disrupt our operations. Further, if we are unable to
control health care and pension costs provided for in the collective bargaining
agreement, we may experience increased operating costs and an adverse impact on
future results of operations.
FOOD
SAFETY
The
Company could be adversely affected if consumers lose confidence in the safety
and quality of the food supply chain. Adverse publicity about these
types of concerns, whether or not valid, could discourage consumers from buying
our products. The real or perceived sale of contaminated food
products by us could result in a loss of consumer confidence and product
liability claims, which could have a material adverse effect on our sales and
operations.
MULTI-EMPLOYER PENSION
PLANS
The
Company is required to make contributions to multi-employer pension plans in
amounts established under collective bargaining agreements. Pension
expense for these plans is recognized as contributions are
funded. Benefits generally are based on a fixed amount for each year
of service. Based on the most recent information available to us, we
believe a number of these multi-employer plans are underfunded. As a
result, we expect that contributions to these plans may
increase. Additionally, the benefit levels and related items will be
issues in the negotiation of our collective bargaining
agreements. Under current law, an employer that withdraws or
partially withdraws from a multi-employer pension plan may incur withdrawal
liability to the plan, which represents the portion of the plan’s underfunding
that is allocable to the withdrawing employer under very complex actuarial and
allocation rules. The failure of a withdrawing employer to fund these
obligations can impact remaining employers. The amount of any
increase or decrease in our required contributions to these multi-employer
pension plans will depend upon the outcome of collective bargaining, actions
taken by trustees who manage the plans, government regulations and the actual
return on assets held in the plans, among other factors.
WASHINGTON
CONSTRUCTION
The
Company began construction of the replacement store in Washington, New Jersey,
which is land leased, despite a pending appeal of the approvals received from
the Township. Management believes, based on an opinion obtained
from a prominent land use attorney, there is only a slim possibility of the
approvals obtained being overturned and the Company’s expenditures and assets
being at risk.
11
FINANCIAL
ENVIRONMENT
We maintain significant amounts of cash
and cash equivalents at financial institutions that are in excess of federally
insured limits. Given the current instability of financial
institutions, we cannot be assured that we will not experience losses on these
deposits. In addition, in the current environment, we cannot be assured that
Village’s $20 million revolving credit line will be available for borrowing, or
that Village will be able to replace the credit line upon its expiration on
September 16, 2009. We do not anticipate drawing on the credit
line prior to its expiration, except for letters of credit to insure
construction performance guarantees to municipalities.
ITEM
1B. UNRESOLVED STAFF
COMMENTS
Not applicable.
ITEM
2. PROPERTIES
As of
July 26, 2008, Village owns the sites of five of its supermarkets (containing
335,000 square feet of total space), all of which are freestanding stores,
except the Egg Harbor store, which is part of a shopping center. The
remaining twenty supermarkets (containing 1,059,000 square feet of total space)
and the corporate headquarters are leased, with initial lease terms generally
ranging from twenty to thirty years, usually with renewal
options. Eleven of these leased stores are located in shopping
centers and the remaining nine are freestanding stores.
The
annual rent, including capitalized leases, for all of the Company's leased
facilities for the year ended July 26, 2008 was approximately
$11,356.
We
believe certain conditions in the lease for current store in Washington, New
Jersey have been triggered extending the lease term to at least January 31,
2009, which is before the expected completion of the replacement store in spring
2009. The Company is currently negotiating to further extend
the lease term to eliminate the possibility of a period of time between the
closing of current store and the opening of the replacement store.
Village
is a limited partner in three partnerships, one of which owns a shopping center
in which one of our leased stores is located. The Company is also a
general partner in a partnership that is a lessor of one of the Company's
freestanding stores.
ITEM
3. LEGAL
PROCEEDINGS
The Company, in the ordinary course of
business, is involved in various legal proceedings. Village does not
believe the outcome of these proceedings will have a material adverse effect on
the Company’s consolidated financial condition, results of operations or
liquidity.
12
ITEM
4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
No
matters submitted to shareholders in the fourth quarter.
PART II
ITEM
5. MARKET FOR THE REGISTRANT'S COMMON
EQUITY,
RELATED STOCKHOLDER MATTERS
AND ISSUER
PURCHASES OF EQUITY SECURITIES
The
information required by this Item is incorporated by reference from Information
appearing on Page 28 in the Company's Annual Report to Shareholders for the
fiscal year ended July 26, 2008 and in the Company’s definitive Proxy Statement
to be filed on or before November 3, 2008 in connection with its Annual Meeting
scheduled to be held on December 5, 2008.
ITEM
6. SELECTED
FINANCIAL DATA
The
information required by this Item is incorporated by reference from Information
appearing on Page 3 in the Company's Annual Report to Shareholders for the
fiscal year ended July 26, 2008.
ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The
information required by this Item is incorporated by reference from Information
appearing on Pages 4 through 9 in the Company's Annual Report to Shareholders
for the fiscal year ended July 26, 2008.
ITEM
7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT
MARKET RISK
The information required by this Item
is incorporated by reference from Information appearing on Page 9 in the
Company's Annual Report to Shareholders for the fiscal year ended July 26,
2008.
ITEM
8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
The
information required by this Item is incorporated by reference from Information
appearing on Page 3 and Pages 10 to 27 in the Company's Annual Report to
Shareholders for the fiscal year ended July 26, 2008.
13
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
ITEM
9A. CONTROLS AND
PROCEDURES
As
required by Rule 13a-15 of 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 covered by this
report. 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 changes in internal controls over financial reporting during the
fourth quarter of fiscal 2008 that have materially, or are reasonably likely to
materially effect, the Company’s internal control over financial
reporting.
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.
Management’s
Report on Internal Control over Financial Reporting and the Report of
Independent Registered Public Accounting Firm are incorporated by reference from
information appearing on page 27 in the Company’s Annual Report to Shareholders
for the fiscal year ended July 26, 2008.
PART III
ITEM
10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
The
information required by this Item 10 is incorporated by reference from the
Company's definitive Proxy Statement to be filed on or before November 3, 2008,
in connection with its Annual Meeting scheduled to be held on December 5,
2008.
ITEM
11. EXECUTIVE
COMPENSATION
The
information required by this Item 11 is incorporated by reference from the
Company's definitive Proxy Statement to be filed on or before November 3, 2008,
in connection with its Annual Meeting scheduled to be held on December 5,
2008.
14
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The
information required by this Item 12 is incorporated by reference from the
Company's definitive Proxy Statement to be filed on or before November 3, 2008,
in connection with its annual meeting scheduled to be held on December 5,
2008.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR
INDEPENDENCE
The
information required by this Item 13 is incorporated by reference from the
Company's definitive Proxy Statement to be filed on or before November 3, 2008,
in connection with its annual meeting scheduled to be held on December 5,
2008.
ITEM
14. PRINCIPAL ACCOUNTING FEES
AND SERVICES
The information required by this Item
14 is incorporated by reference from the Company’s definitive Proxy Statement to
be filed on or before November 3, 2008 in connection with its annual meeting
scheduled to be held on December 5, 2008.
PART IV
ITEM
15. EXHIBITS, FINANCIAL
STATEMENTS SCHEDULES
|
(a)
|
1.
|
Financial
Statements:
|
|
Consolidated
Balance Sheets - July 26, 2008 and July 28, 2007.
|
||
|
Consolidated
Statements of Operations - years ended July
26, 2008, July 28, 2007 and July 29, 2006.
|
||
|
|
||
|
Consolidated
Statements of Shareholders' Equity and Comprehensive Income – years ended
July 26, 2008, July 28, 2007 and July 29, 2006.
|
||
|
|
||
|
Consolidated
Statements of Cash Flows - years ended July
26, 2008, July 28, 2007 and July 29, 2006.
|
||
|
|
||
|
Notes
to consolidated financial statements.
|
||
|
The
consolidated financial statements above and the Report of Independent
Registered Public Accounting Firm have been incorporated by reference from
the Company's Annual Report to Shareholders for the fiscal year ended July
26, 2008.
|
||
|
2.
|
Financial
Statement Schedules:
|
|
|
All
schedules are omitted because they are not applicable, or not required, or
because the required information is included in the consolidated financial
statements or notes thereto.
|
|
3.
|
Exhibits
|
EXHIBIT
INDEX
|
Exhibit
No.
|
3
|
3.1
|
Certificate
of Incorporation*
|
|
3.2
|
By-laws*
|
||
|
Exhibit
No.
|
4
|
Instruments
defining the rights of security holders:
|
|
|
4.5
|
Note
Purchase Agreement dated September 16, 1999*
|
||
|
4.6
|
Loan
Agreement dated September 16, 1999*
|
||
|
4.7
|
First
Amendment to Loan Agreement*
|
||
|
Exhibit
No.
|
10
|
Material
Contracts:
|
|
|
10.1
|
Wakefern
By-Laws
|
||
|
10.2
|
Stockholders
Agreement dated February 20, 1992 between
the Company and Wakefern Food Corp.*
|
||
|
10.3
|
Voting
Agreement dated March 4, 1987*
|
||
|
10.6
|
Employment
Agreement dated May 28, 2004*
|
||
|
10.7
|
Supplemental
Executive Retirement Plan*
|
||
|
10.8
|
2004
Stock Plan*
|
||
|
Exhibit
No.
|
13
|
||
|
Exhibit
No.
|
14
|
||
|
Exhibit
No.
|
21
|
||
|
Exhibit
No.
|
23
|
||
|
Exhibit
No.
|
31.1
|
||
|
Exhibit
No.
|
31.2
|
||
|
Exhibit
No.
|
32.1
|
||
|
Exhibit
No.
|
32.2
|
||
|
* The
following exhibits are incorporated by reference from the following
previous filings:
|
|||
|
Form
10-K for 2004: 3.2, 4.7, 10.7
|
|||
|
DEF
14A proxy statement filed October 25, 2004: 10.8
|
|||
|
Form
10-Q for April 2004: 10.6
|
|||
|
Form
10-K for 1999: 4.5, 4.6
|
|||
|
Form
10-K for 1993: 3.1, 10.2 and 10.3
|
|||
16
|
|
SIGNATURES
|
Pursuant
to the requirements of Section 13 or 15(d) 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.
|
|||||
|
By:
|
/s/
|
Kevin
Begley
|
By:
|
/s/
|
James Sumas___
_______
|
|
Kevin
Begley
|
James
Sumas
|
||||
|
Chief
Financial &
|
Chief
Executive Officer
|
||||
|
Principal
Accounting Officer
|
Date: October
8, 2008
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on dates indicated:
|
Village
Super Market, Inc.
|
|||
|
/s/
|
Perry
Sumas
|
/s/
|
James
Sumas__________
|
|
Perry
Sumas, Director
|
James
Sumas, Director
|
||
|
October
8, 2008
|
October
8, 2008
|
||
|
/s/
|
Robert
Sumas
|
/s/
|
William
Sumas__________
|
|
Robert
Sumas, Director
|
William
Sumas, Director
|
||
|
October
8, 2008
|
October
8, 2008
|
||
|
/s/
|
John P.
Sumas
|
/s/
|
John J.
McDermott_______
|
|
John
P. Sumas, Director
|
John
J. McDermott, Director
|
||
|
October
8, 2008
|
October
8, 2008
|
||
|
/s/
|
David C .
Judge
|
/s/
|
Steven
Crystal__________
|
|
David
C. Judge, Director
|
Steven
Crystal, Director
|
||
|
October
8, 2008
|
October
8, 2008
|
17