What changed in this filing

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Item 1. Financial Statements

2022-03-10 compared with 2021-12-08 · 115 added, 57 removed, 258 unchanged (40% of the section changed)

45 unchanged sentences

Authorized 20,000 shares;

issued 10,987 shares at October 30, 2021 and 10,978 shares at July 31, 2021

issued 10,981 shares at January 29, 2022 and 10,978 shares at July 31, 2021

71,808 70,594

1 unchanged sentence

Authorized 20,000 shares;

issued and outstanding 4,294 shares at October 30, 2021 and July 31, 2021

issued and outstanding 4,294 shares at January 29, 2022 and July 31, 2021

Retained earnings 304,117 293,185

1 unchanged sentence

Less treasury stock, Class A, at cost:

730 shares at October 30, 2021 and 726 shares at July 31, 2021

730 shares at January 29, 2022 and 726 shares at July 31, 2021

( 14,028 ) ( 13,939 )

6 unchanged sentences

(In thousands, except per share amounts) (Unaudited)

13 Weeks Ended

2021 October 24,

13 Weeks Ended 26 Weeks Ended

2022 January 23,

2021 January 29,

2022 January 23,

Sales $ 537,408 $ 522,818 $ 1,031,619 $ 1,012,954

21 unchanged sentences

(In thousands) (Unaudited)

13 Weeks Ended

2021 October 24,

13 Weeks Ended 26 Weeks Ended

2022 January 23,

2021 January 29,

2022 January 23,

Net income $ 10,129 $ 4,555 $ 17,457 $ 7,916

3 unchanged sentences

Comprehensive income $ 10,976 $ 5,157 $ 19,183 $ 9,213

(1) Amount is net of tax of $ 339 and $ 261 for the 13 weeks ended October 30, 2021 and October 24, 2020, respectively.

(2) Amounts are net of tax of $ 38 and $ 46 for the 13 weeks October 30, 2021 and October 24, 2020, respectively.

(1) Amount is net of tax of $ 324 and $ 218 for the 13 weeks January 29, 2022 and January 23, 2021, respectively, and $ 663 and $ 479 for the 26 weeks ended January 29, 2022 and January 23, 2021, respectively.

(2) Amounts are net of tax of $ 38 and $ 45 for the 13 weeks January 29, 2022 and January 23, 2021, respectively, and $ 76 and $ 91 for the 26 weeks ended January 29, 2022 and January 23, 2021, respectively.

All amounts are reclassified from accumulated other comprehensive loss to operating and administrative expense.

4 unchanged sentences

(In thousands) (Unaudited)

13 Weeks Ended October 30, 2021 and October 24, 2020

13 Weeks Ended January 29, 2022 and January 23, 2021

Common Stock Class B

6 unchanged sentences

Shares Issued Amount Shares Issued Amount Retained Earnings Shares Amount

Balance, October 30, 2021

10,987 $ 71,238 4,294 $ 697 $ 297,249 $ ( 8,185 ) 730 $ ( 14,028 ) $ 346,971

Net income — — — — 10,129 — — — 10,129

Other comprehensive income, net of tax of $ 362

— — — — — 847 — — 847

Dividends — — — — ( 3,261 ) — — — ( 3,261 )

Restricted shares forfeited ( 6 ) ( 56 ) — — — — — — ( 56 )

Share-based compensation expense — 626 — — — — — — 626

Balance, January 29, 2022

10,981 $ 71,808 4,294 $ 697 $ 304,117 $ ( 7,338 ) 730 $ ( 14,028 ) $ 355,256

Balance, October 24, 2020

10,988 $ 68,695 4,294 $ 697 $ 286,344 $ ( 8,056 ) 726 $ ( 13,939 ) $ 333,741

Net income — — — — 4,555 — — — 4,555

Other comprehensive income, net of tax of $ 263

— — — — — 602 — — 602

Dividends — — — — ( 3,265 ) — — — ( 3,265 )

Restricted shares forfeited ( 3 ) ( 12 ) — — — — — — ( 12 )

Share-based compensation expense — 641 — — — — — — 641

Balance, January 23, 2021

10,985 $ 69,324 4,294 $ 697 $ 287,634 $ ( 7,454 ) 726 $ ( 13,939 ) $ 336,262

26 Weeks Ended January 29, 2022 and January 23, 2021

Common Stock Class B

Common Stock Accumulated

Comprehensive

Income (Loss)

Treasury Stock

Class A Total

Shareholders'

Shares Issued Amount Shares Issued Amount Retained Earnings Shares Amount

Balance, July 31, 2021

10,978 $ 70,594 4,294 $ 697 $ 293,185 $ ( 9,064 ) 726 $ ( 13,939 ) $ 341,473

Net income — — — — 17,457 — — — 17,457

3 unchanged sentences

Treasury stock purchases — — — — — — 4 ( 89 ) ( 89 )

Restricted shares forfeited ( 6 ) ( 56 ) — — — — — — ( 56 )

Share-based compensation expense 9 1,270 — — — — — — 1,270

Balance, October 30, 2021 10,987 $ 71,238 4,294 $ 697 $ 297,249 $ ( 8,185 ) 730 $ ( 14,028 ) $ 346,971

Balance, January 29, 2022

10,981 $ 71,808 4,294 $ 697 $ 304,117 $ ( 7,338 ) 730 $ ( 14,028 ) $ 355,256

Balance, July 25, 2020

10,985 $ 68,072 4,294 $ 697 $ 286,241 $ ( 8,751 ) 726 $ ( 13,939 ) $ 332,320

Net income — — — — 7,916 — — — 7,916

4 unchanged sentences

Share-based compensation expense 8 1,276 — — — — — — 1,276

Balance, October 24, 2020 10,988 $ 68,695 4,294 $ 697 $ 286,344 $ ( 8,056 ) 726 $ ( 13,939 ) $ 333,741

Balance, January 23, 2021

10,985 $ 69,324 4,294 $ 697 $ 287,634 $ ( 7,454 ) 726 $ ( 13,939 ) $ 336,262

See notes to consolidated financial statements.

4 unchanged sentences

26 Weeks Ended

2021 October 24,

2022 January 23,

CASH FLOWS FROM OPERATING ACTIVITIES

14 unchanged sentences

Other assets and liabilities 229 ( 2,370 )

Net cash provided by (used in) operating activities 7,887 ( 3,353 )

Net cash provided by operating activities 40,274 24,911

CASH FLOWS FROM INVESTING ACTIVITIES

11 unchanged sentences

Net cash used in financing activities ( 3,243 ) ( 10,836 )

NET DECREASE IN CASH AND CASH EQUIVALENTS ( 11,227 ) ( 12,079 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 9,583 3,083

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 116,314 111,681

10 unchanged sentences

BASIS OF PRESENTATION and ACCOUNTING POLICIES

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of October 30, 2021 and the consolidated statements of operations, comprehensive income and cash flows for the 13 weeks ended October 30, 2021 and October 24, 2020 of Village Super Market, Inc.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of January 29, 2022 and the consolidated statements of operations, comprehensive income and cash flows for the 13 and 26 weeks ended January 29, 2022 and January 23, 2021 of Village Super Market, Inc.

(“Village” or the “Company”).

1 unchanged sentence

Annual Report on Form 10-K, which should be read in conjunction with these financial statements.

The results of operations for the periods ended October 30, 2021 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the periods ended January 29, 2022 are not necessarily indicative of the results to be expected for the full year.

Disaggregated Revenues

The following table presents the Company's sales by product categories during each of the periods indicated:

13 Weeks Ended

October 30, 2021 October 24, 2020

Amount % Amount %

13 Weeks Ended 26 Weeks Ended

January 29, 2022 January 23, 2021 January 29, 2022 January 23, 2021

Amount % Amount % Amount % Amount %

Center Store (1) $ 324,362 60.3 % $ 321,829 61.5 % $ 620,336 60.1 % $ 617,769 61.0 %

7 unchanged sentences

MERCHANDISE INVENTORIES

At both October 30, 2021 and July 31, 2021, approximately 62 % 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 $ 15,571 and $ 15,321 higher than reported at October 30, 2021 and July 31, 2021, respectively.

At both January 29, 2022 and July 31, 2021, approximately 62 % 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 $ 15,842 and $ 15,321 higher than reported at January 29, 2022 and July 31, 2021, respectively.

NET INCOME PER SHARE

9 unchanged sentences

The tables below reconcile the numerators and denominators of basic and diluted net income per share for all periods presented.

13 Weeks Ended

October 30, 2021

Class A Class B

13 Weeks Ended 26 Weeks Ended

January 29, 2022 January 29, 2022

Class A Class B Class A Class B

Net income allocated, basic $ 7,666 $ 2,165 $ 13,204 $ 3,732

4 unchanged sentences

Weighted average shares outstanding, diluted 14,167 4,294 14,162 4,294

13 Weeks Ended

October 24, 2020

Class A Class B

13 Weeks Ended 26 Weeks Ended

January 23, 2021 January 23, 2021

Class A Class B Class A Class B

Net income allocated, basic $ 3,437 $ 974 $ 5,971 $ 1,692

4 unchanged sentences

Weighted average shares outstanding, diluted 14,144 4,294 14,144 4,294

Outstanding stock options to purchase Class A shares of 102 and 154 were excluded from the calculation of diluted net income per share at October 30, 2021 and October 24, 2020, respectively, as a result of their anti-dilutive effect.

In addition, 388 and 416 non-vested restricted Class A shares, which are considered participating securities, and their allocated net income were excluded from the diluted net income per share calculation at October 30, 2021 and October 24, 2020, respectively, due to their anti-dilutive effect.

Outstanding stock options to purchase Class A shares of 102 and 156 were excluded from the calculation of diluted net income per share at January 29, 2022 and January 23, 2021, respectively, as a result of their anti-dilutive effect.

In addition, 380 and 413 non-vested restricted Class A shares, which are considered participating securities, and their allocated net income were excluded from the diluted net income per share calculation at January 29, 2022 and January 23, 2021, respectively, due to their anti-dilutive effect.

PENSION PLANS

Net periodic pension cost for the three defined benefit pension plans sponsored in fiscal 2022 and 2021 includes the following components:

13 Weeks Ended

2021 October 24,

13 Weeks Ended 26 Weeks Ended

2022 January 23,

2021 January 29,

2022 January 23,

Service cost $ 47 $ 54 $ 94 $ 108

3 unchanged sentences

Net periodic pension cost $ 184 $ 140 $ 368 $ 280

As of October 30, 2021, the Company has no t made any contributions to its pension plans in fiscal 2022.

As of January 29, 2022, the Company has no t made any contributions to its pension plans in fiscal 2022.

The Company expects to terminate one of the plans during fiscal 2022.

4 unchanged sentences

A description of the Company’s transactions with Wakefern, its principal supplier, and with other related parties is included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2021.

Included in cash and cash equivalents at October 30, 2021 and July 31, 2021 are $ 75,850 and $ 86,670 , respectively, of demand deposits invested at Wakefern at overnight money market rates.

There have been no other significant changes in the Company’s relationships or nature of transactions with related parties during the 13 weeks ended October 30, 2021.

Included in cash and cash equivalents at January 29, 2022 and July 31, 2021 are $ 88,338 and $ 86,670 , respectively, of demand deposits invested at Wakefern at overnight money market rates.

There have been no other significant changes in the Company’s relationships or nature of transactions with related parties during the 26 weeks ended January 29, 2022.

COMMITMENTS and CONTINGENCIES

3 unchanged sentences

2022 July 31,

Secured term loan $ 46,199 $ 47,025

Secured term loans $ 52,650 $ 47,025

Unsecured term loan 19,307 21,104

4 unchanged sentences

Credit Facility

On May 6, 2020, Village entered into a credit agreement (the “Credit Facility”) with Wells Fargo National Bank, National Association (“Wells Fargo”) that supersedes in its entirety the prior credit agreement with Wells Fargo dated November 9, 2017.

The principal purpose of the Credit Facility is to finance general corporate and working capital requirements and Village’s acquisition of certain Fairway Markets assets, including five stores and a production distribution center.

Among other things, the Credit Facility provides for a maximum loan amount of $ 150,500 as further set forth below:

On January 28, 2022, the Company entered into an amended and restated credit agreement of the Company’s $ 150,500 credit facility (the “Credit Facility”) with Wells Fargo National Bank, National Association (“Wells Fargo”).

The notable changes from the previous agreement include:

(1) Modification of the reference rate from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") as a result of the expected cessation of LIBOR, (2) The execution of a fifteen-year $ 7,350 secured term loan to finance the acquisition of the Galloway store shopping center and (3) Modification of the definition of Total Adjusted Debt for the purpose of determining the maximum adjusted debt to EBITDAR ratio financial covenant, as defined in the Credit Facility.

Among other things, the Credit Facility provides for:

• An unsecured revolving line of credit providing a maximum amount available for borrowing of $ 75,000 .

Indebtedness under this agreement bears interest at the applicable LIBOR rate plus 1.10 % and expires on May 6, 2025.

• An unsecured term loan with a maximum loan amount of $ 25,500 .

On May 12, 2020, Village executed a $ 25,500 term note, repayable in equal monthly installments based on a seven-year amortization schedule through May 4, 2027 and bearing interest at the applicable LIBOR rate plus 1.35 %.

Additionally, Village executed an interest rate swap for a notional amount equal to the term loan amount that fixes the base LIBOR rate at .41 % per annum through May 4, 2027, resulting in a fixed effective interest rate of 1.76 % on the term note.

• On September 1, 2020, Village converted $ 50,000 of its revolving line of credit to a secured converted term loan.

The conversion reduced the maximum amount available for borrowing under the revolving line of credit from $ 125,000 to $ 75,000 .

The term loan bears interest at the applicable LIBOR rate plus 1.50 % and is repayable in equal monthly installments based on a fifteen-year amortization schedule beginning on the conversion date.

Additionally, Village previously executed a forward interest rate swap, effective on the conversion date, for a notional amount equal to the term loan amount that fixes the base LIBOR rate at .69 % per annum for 15 years, resulting in a fixed effective interest rate of 2.19 % on the converted term loan.

Indebtedness under this agreement bears interest at the applicable SOFR plus 1.10 % and expires on May 6, 2025.

• An unsecured $ 25,500 term loan issued on May 12, 2020, repayable in equal monthly installments based on a seven-year amortization schedule through May 4, 2027 and bearing interest at the applicable SOFR plus 1.46 %.

Prior to the January 28, 2022 amendment to the credit facility, interest accrued on the unsecured term loan at the applicable LIBOR plus 1.35 %.

An interest rate swap with notional amounts equal to the term loan fixed the base LIBOR at .41 %, resulting in a fixed effective rate of 1.76 %.

In February 2022, the Company executed an amendment and restatement of the interest rate swap that changes the reference rate to SOFR and fixes the base SOFR at .26 % per annum through May 4, 2027, resulting in a fixed effective interest rate of 1.72 % on the term loan.

• A secured $ 50,000 term loan issued on September 1, 2020 repayable in equal monthly installments based on a fifteen-year amortization schedule through September 1, 2035 and bearing interest at the applicable SOFR plus 1.61 %.

Prior to the January 28, 2022 amendment to the credit facility, interest accrued on the secured term loan at the applicable LIBOR plus 1.50 %.

An interest rate swap with notional amounts equal to the term loan fixed the base LIBOR at .69 %, resulting in a fixed effective rate of 2.19 %.

In February 2022, the Company executed an amendment and restatement of the interest rate swap related to the term loan that changes the reference rate to SOFR and fixes the base SOFR at .57 % per annum through September 1, 2035, resulting in a fixed effective interest rate of 2.18 % on the term loan.

The term loan is secured by real properties of Village Super Market, Inc.

and its subsidiaries, including the sites of three Village stores.

The Credit Facility also provides for up to $ 25,000 of letters of credit ($ 7,336 outstanding at October 30, 2021), which secure obligations for store leases and construction performance guarantees to municipalities.

The Credit Facility contains covenants that, among other conditions, require a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum adjusted debt to EBITDAR ratio.

The Company was in compliance with all covenants of the credit agreement at October 30, 2021.

• A secured $ 7,350 term loan issued on January 28, 2022 repayable in equal monthly installments based on a fifteen-year amortization schedule through January 28, 2037 and bearing interest at the applicable SOFR plus 1.50 %.

Additionally, Village executed an interest rate swap for a notional amount equal to the term loan amount that fixes the base SOFR at 1.41 % per annum, resulting in a fixed effective interest rate of 2.91 % on the term loan.

The term loan is secured by the Galloway store shopping center acquired in the first quarter of fiscal 2022.

The principal purpose of the Credit Facility is to finance general corporate and working capital requirements, Village’s acquisition of certain Fairway assets and the purchase of the Galloway store shopping center.

The Credit Facility also provides for up to $ 25,000 of letters of credit ($ 7,336 outstanding at January 29, 2022), which secure obligations for store leases and construction performance guarantees to municipalities.

The Credit Facility contains covenants that, among other conditions,

require a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum adjusted debt to EBITDAR ratio.

The Company was in compliance with all covenants of the credit agreement at January 29, 2022.

New Markets Tax Credit Financing

22 unchanged sentences

DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to interest rate risk arising from fluctuations in LIBOR related to the Company’s Credit Facility.

The Company is exposed to interest rate risk arising from fluctuations in LIBOR and SOFR related to the Company’s Credit Facility.

The Company manages exposure to this risk and the variability of related cash flows primarily by the use of derivative financial instruments, specifically, interest rate swaps.

1 unchanged sentence

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

In 2020, the Company executed two interest rate swaps with an aggregate notional value of $ 75,500 to hedge the variable cash flows associated with variable-rate loans under the Company's Credit Facility.

As of January 29, 2022, the Company had three interest rate swaps with an aggregate notional value of $ 82,850 to hedge the variable cash flows associated with variable-rate loans under the Company's Credit Facility.

The interest rate swaps were executed for risk management and are not held for trading purposes.

The objective of the interest rate swaps is to hedge the variability of cash flows resulting from fluctuations in LIBOR.

The swaps replaced the applicable LIBOR with fixed interest rates and payments are settled monthly when payments are made on the variable-rate loans.

The objective of the interest rate swaps is to hedge the variability of cash flows resulting from fluctuations in the reference rate.

The swaps replaced the applicable reference rate with fixed interest rates and payments are settled monthly when payments are made on the variable-rate loans.

The Company's derivatives qualify and have been designated as cash flow hedges of interest rate risk.

1 unchanged sentence

Amounts reported in Accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the variable-rate loans.

The Company reclassified $ 88 and $ 66 during the 13 weeks ended October 30, 2021 and October 24, 2020, respectively, from Accumulated other comprehensive loss to Interest expense.

The notional value of the interest rate swaps were $ 66,728 as of October 30, 2021.

The fair value of interest rate swaps recorded in other assets is $ 2,241 as of October 30, 2021.

The Company reclassified $ 85 and $ 82 during the 13 weeks ended January 29, 2022 and January 23, 2021, respectively, and $ 173 and $ 148 during the 26 weeks ended January 29, 2022 and January 23, 2021, respectively, from Accumulated other comprehensive loss to Interest expense.

The notional value of the interest rate swaps were $ 72,334 as of January 29, 2022.

The fair value of interest rate swaps recorded in other assets is $ 3,331 as of January 29, 2022.

In March 2020 and January 2021, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and ASU 2021-01, "Reference Rate Reform:

Scope", respectively.

These standards provide temporary optional expedients and exceptions for the application of GAAP to certain contract modifications, hedging relationships, and other arrangements that are expected to be impacted by the global transition away from certain reference rates, such as LIBOR.

The guidance was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022.

During the second quarter of fiscal 2022, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Additionally, we elected to apply expedients related to the modification of hedged transactions related to reference rate reform.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

The adoption of this portion of the ASU is not expected to have a material impact to our consolidated financial statements.

We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In connection with the modification of the reference rate from LIBOR to SOFR in the Amended and Restated Credit Facility, in February 2022, the Company executed the amendment and restatement of two interest rate swaps (see note 7).

The modified rates are not expected to have a material impact to the consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements