Company Quick10K Filing
Village Super Market
Price1.00 EPS-21,837,000
Shares-0 P/E-0
MCap-0 P/FCF-0
Net Debt50 EBIT35
TEV50 TEV/EBIT1
TTM 2019-10-26, in MM, except price, ratios
10-Q 2021-01-23 Filed 2021-03-04
10-Q 2020-10-24 Filed 2020-12-03
10-K 2020-07-25 Filed 2020-10-08
10-Q 2020-04-25 Filed 2020-06-04
10-Q 2020-01-25 Filed 2020-03-05
10-Q 2019-10-26 Filed 2019-12-05
10-K 2019-07-27 Filed 2019-10-10
10-Q 2019-04-27 Filed 2019-06-04
10-Q 2019-01-26 Filed 2019-03-06
10-Q 2018-10-27 Filed 2018-12-06
10-K 2018-07-28 Filed 2018-10-11
10-Q 2018-04-28 Filed 2018-06-07
10-Q 2018-01-27 Filed 2018-03-08
10-Q 2017-10-28 Filed 2017-12-05
10-K 2017-07-29 Filed 2017-10-12
10-Q 2017-04-29 Filed 2017-06-07
10-Q 2017-01-28 Filed 2017-03-09
10-Q 2016-10-29 Filed 2016-12-07
10-K 2016-07-30 Filed 2016-10-12
10-Q 2016-04-23 Filed 2016-06-02
10-Q 2016-01-23 Filed 2016-03-02
10-Q 2015-10-24 Filed 2015-12-03
10-K 2015-07-25 Filed 2015-10-07
10-Q 2015-04-25 Filed 2015-06-03
10-Q 2015-01-24 Filed 2015-03-04
10-Q 2014-10-25 Filed 2014-12-03
10-K 2014-07-26 Filed 2014-10-08
10-Q 2014-04-26 Filed 2014-06-04
10-Q 2014-01-25 Filed 2014-03-04
10-Q 2013-10-26 Filed 2013-12-04
10-Q 2013-04-27 Filed 2013-06-05
10-Q 2013-01-26 Filed 2013-03-06
10-Q 2012-10-27 Filed 2012-12-05
10-K 2012-07-28 Filed 2012-10-09
10-Q 2012-04-28 Filed 2012-06-06
10-Q 2012-01-28 Filed 2012-03-07
10-Q 2011-10-29 Filed 2011-12-08
10-K 2011-07-30 Filed 2011-10-12
10-Q 2011-04-30 Filed 2011-06-09
10-Q 2011-01-29 Filed 2011-03-08
10-Q 2010-10-30 Filed 2010-12-08
10-K 2010-07-31 Filed 2010-10-12
10-Q 2010-04-24 Filed 2010-06-02
10-Q 2010-01-23 Filed 2010-03-03
8-K 2020-09-11
8-K 2020-09-08
8-K 2020-06-12
8-K 2020-05-20
8-K 2020-05-12
8-K 2020-04-24
8-K 2020-03-31
8-K 2020-03-13
8-K 2020-02-20
8-K 2019-12-13
8-K 2019-10-07
8-K 2019-09-16
8-K 2019-06-14
8-K 2019-03-15
8-K 2018-12-17
8-K 2018-12-14
8-K 2018-10-08
8-K 2018-09-14
8-K 2018-06-15
8-K 2018-03-16

VLGEA 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
EX-31.1 vlgea20210123ex-311.htm
EX-31.2 vlgea20210123ex-312.htm
EX-32.1 vlgea20210123ex-321.htm
EX-32.2 vlgea20210123ex-322.htm
EX-99.1 vlgea2021012310-qexhibit991.htm

Village Super Market Earnings 2021-01-23

Balance SheetIncome StatementCash Flow
58546835123411702012201420172020
Assets, Equity
44035026017080-102012201420172020
Rev, G Profit, Net Income
402612-2-16-302012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended January 23, 2021
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 Jersey22-1576170
(State or other jurisdiction of incorporation or organization)(I. R. S. Employer Identification No.)
  
733 Mountain Avenue, Springfield, New Jersey, 07081
(Address of principal executive offices) (Zip Code)
  
Registrant's telephone number, including area code:
(973) 467-2200
Securities registered pursuant to Section 12(b) of the Act:
Class A common stock, no par valueVLGEAThe NASDAQ Stock Market
(Title of Class)(Trading Symbol)(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:  None
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    No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes    No ☐

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.

Large accelerated filer  
Accelerated filer  ☒
Non-accelerated filer   
 (Do not check if a smaller reporting company)
Smaller reporting company  
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No ☒.
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
 March 4, 2021
  
Class A Common Stock, No Par Value10,259,088 Shares
Class B Common Stock, No Par Value 4,293,748 Shares





VILLAGE SUPER MARKET, INC.

INDEX



PART I  PAGE NO.
  
FINANCIAL INFORMATION 
  
Item 1. Financial Statements (Unaudited) 
  
Consolidated Balance Sheets
  
Consolidated Statements of Operations
  
Consolidated Statements of Comprehensive Income
Consolidated Statements of Shareholders' Equity
  
Consolidated Statements of Cash Flows
  
Notes to Consolidated Financial Statements
  
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
  
Item 3.  Quantitative & Qualitative Disclosures about Market Risk
  
Item 4.  Controls and Procedures
  
PART II 
  
OTHER INFORMATION 
Item 6.  Exhibits
  
Signatures

2


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
 January 23,
2021
July 25,
2020
ASSETS  
Current assets  
Cash and cash equivalents$114,764 $111,681 
Merchandise inventories47,108 42,135 
Patronage dividend receivable4,396 11,204 
Income taxes receivable9,078 12,801 
Other current assets23,612 19,499 
Total current assets198,958 197,320 
Property, equipment and fixtures, net261,542 269,741 
Operating lease assets303,440 309,756 
Notes receivable from Wakefern54,149 53,008 
Investment in Wakefern30,202 29,462 
Goodwill24,190 24,190 
Other assets33,124 32,069 
Total assets$905,605 $915,546 
LIABILITIES and SHAREHOLDERS' EQUITY  
Current liabilities
Operating lease obligations$20,462 $19,121 
Finance lease obligations500 466 
Notes payable to Wakefern369 303 
Current portion of debt6,976 6,421 
Accounts payable to Wakefern81,083 83,045 
Accounts payable and accrued expenses28,562 29,793 
Accrued wages and benefits22,692 23,649 
Income taxes payable112  
Total current liabilities160,756 162,798 
Long-term debt
Operating lease obligations292,151 298,027 
Finance lease obligations22,707 23,078 
Notes payable to Wakefern734 882 
Long-term debt70,401 74,194 
Total long-term debt385,993 396,181 
Pension liabilities6,152 6,166 
Other liabilities16,442 18,081 
Commitments and contingencies
Shareholders' equity  
Preferred stock, no par value: Authorized 10,000 shares, none issued
  
Class A common stock, no par value: Authorized 20,000 shares; issued 10,985 shares at January 23, 2021 and July 25, 2020
69,324 68,072 
Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,294 shares at January 23, 2021 and July 25, 2020
697 697 
Retained earnings287,634 286,241 
Accumulated other comprehensive loss(7,454)(8,751)
Less treasury stock, Class A, at cost: 726 shares at January 23, 2021 and July 25, 2020
(13,939)(13,939)
Total shareholders’ equity336,262 332,320 
Total liabilities and shareholders’ equity$905,605 $915,546 
See notes to consolidated financial statements.
3



VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)
 13 Weeks Ended26 Weeks Ended
 January 23,
2021
January 25,
2020
January 23,
2021
January 25,
2020
Sales$522,818 $437,422 $1,012,954 $844,824 
Cost of sales380,973 319,475 733,146 613,331 
Gross profit141,845 117,947 279,808 231,493 
Operating and administrative expense126,449 107,734 250,812 210,874 
Depreciation and amortization8,793 7,798 17,507 15,237 
Operating income6,603 2,415 11,489 5,382 
Interest expense(982)(568)(1,969)(1,135)
Interest income874 1,030 1,766 2,289 
Income before income taxes6,495 2,877 11,286 6,536 
Income taxes1,940 872 3,370 1,964 
Net income$4,555 $2,005 $7,916 $4,572 
Net income per share:   
Class A common stock:   
Basic$0.35 $0.16 $0.61 $0.35 
Diluted$0.31 $0.14 $0.54 $0.32 
Class B common stock:   
Basic$0.23 $0.10 $0.39 $0.23 
Diluted$0.23 $0.10 $0.39 $0.23 
 
See notes to consolidated financial statements.
4



VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands) (Unaudited)
 13 Weeks Ended26 Weeks Ended
 January 23,
2021
January 25,
2020
January 23,
2021
January 25,
2020
Net income$4,555 $2,005 $7,916 $4,572 
Other comprehensive income:    
Unrealized gains on interest rate swaps, net of tax (1)501  1,094  
Amortization of pension actuarial loss, net of tax (2)101 102 203 203 
Pension settlement loss, net of tax (3) 871  871 
Pension remeasurement, net of tax (4) (704) (704)
Comprehensive income$5,157 $2,274 $9,213 $4,942 

(1)Amount is net of tax of $218 and $479 for the 13 and 26 weeks ended January 23, 2021, respectively.
(2)Amounts are net of tax of $45 and $44 for the 13 weeks January 23, 2021 and January 25, 2020, respectively, and $91 and $88 for the 26 weeks ended January 23, 2021 and January 25, 2020, respectively. All amounts are reclassified from accumulated other comprehensive loss to operating and administrative expense.
(3)Amounts are net of tax of $375 for the 13 and 26 weeks ended January 25, 2020. All amounts are reclassified from accumulated other comprehensive loss to operating and administrative expense.
(4)Amounts are net of tax of $303 for the 13 and 26 weeks ended January 25, 2020.


See notes to consolidated financial statements.
5



VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands) (Unaudited)
13 Weeks Ended January 23, 2021 and January 25, 2020
 Class A
Common Stock
Class B
Common Stock
Accumulated
Other
Comprehensive
Income (Loss)

Treasury Stock
Class A
Total
Shareholders'
Equity

 Shares IssuedAmountShares IssuedAmountRetained EarningsSharesAmount
Balance, October 24, 202010,988 $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, 202110,985 $69,324 4,294 $697 $287,634 $(7,454)726 $(13,939)$336,262 
Balance, October 26, 201910,593 $65,947 4,294 $697 $273,614 $(8,241)503 $(9,570)$322,447 
Net income— — — — 2,005 — — — 2,005 
Other comprehensive income, net of tax of $116
— — — — — 269 — — 269 
Dividends— — — — (3,218)— — — (3,218)
Exercise of stock options— — — — — — — — — 
Treasury stock purchases— — — — — — 10 (229)(229)
Restricted shares forfeited(7)(150)— — — — — — (150)
Share-based compensation expense 858 — — — — — — 858 
Balance, January 25, 202010,586 $66,655 4,294 $697 $272,401 $(7,972)513 $(9,799)$321,982 
26 Weeks Ended January 23, 2021 and January 25, 2020
 Class A
Common Stock
Class B
Common Stock
Accumulated
Other
Comprehensive
Income (Loss)

Treasury Stock
Class A
Total
Shareholders'
Equity

 Shares IssuedAmountShares IssuedAmountRetained EarningsSharesAmount
Balance, July 25, 202010,985 $68,072 4,294 $697 $286,241 $(8,751)726 $(13,939)$332,320 
Net income— — — — 7,916 — — — 7,916 
Other comprehensive income, net of tax of $570
— — — — — 1,297 — — 1,297 
Dividends— — — — (6,523)— — — (6,523)
Restricted shares forfeited(8)(24)— — — — — — (24)
Share-based compensation expense8 1,276 — — — — — — 1,276 
Balance, January 23, 202110,985 $69,324 4,294 $697 $287,634 $(7,454)726 $(13,939)$336,262 
Balance, July 27, 201910,593 $65,114 4,294 $697 $270,753 $(8,342)502 $(9,550)$318,672 
Net income— — — — 4,572 — — — 4,572 
Other comprehensive income, net of tax of $160
— — — — — 370 — — 370 
Dividends— — — — (6,438)— — — (6,438)
Treasury stock purchases— — — — — — 11 (249)(249)
Restricted shares forfeited(9)(180)— — — — — — (180)
Share-based compensation expense2 1,721 — — — — — — 1,721 
Adjustment due to the adoption of ASU 2016-02, net of tax of $1,385— — — — 3,514 — — — 3,514 
Balance, January 25, 202010,586 $66,655 4,294 $697 $272,401 $(7,972)513 $(9,799)$321,982 

See notes to consolidated financial statements.

6


VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
 26 Weeks Ended
 January 23,
2021
January 25,
2020
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$7,916 $4,572 
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization18,222 15,237 
Non-cash share-based compensation1,252 1,541 
Loss on pension settlements 1,246 
Deferred taxes(1,456)(291)
Gain on sale of property, equipment and fixtures(84) 
Changes in assets and liabilities: 
Merchandise inventories(4,973)(2,810)
Patronage dividend receivable6,808 7,467 
Accounts payable to Wakefern(2,124)10,109 
Accounts payable and accrued expenses(1,158)(3,957)
Accrued wages and benefits(957)(1,043)
Income taxes receivable / payable3,835 (1,880)
Other assets and liabilities(2,370)(2,430)
Net cash provided by operating activities24,911 27,761 
CASH FLOWS FROM INVESTING ACTIVITIES  
Capital expenditures(9,958)(38,121)
Proceeds from the sale of assets107  
Investment in notes receivable from Wakefern(1,141)(1,546)
Acquisition deposit in escrow (6,860)
Acquisition of Gourmet Garage, net of cash acquired 64 
Net cash used in investing activities(10,992)(46,463)
CASH FLOWS FROM FINANCING ACTIVITIES  
Proceeds from issuance of long-term debt50,000  
Principal payments of long-term debt(4,091)(336)
Payments on revolving line of credit(50,000) 
Debt issuance costs(222) 
Dividends(6,523)(6,438)
Treasury stock purchases (249)
Net cash used in financing activities(10,836)(7,023)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS3,083 (25,725)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD111,681 101,121 
CASH AND CASH EQUIVALENTS, END OF PERIOD$114,764 $75,396 
SUPPLEMENTAL DISCLOSURES OF CASH  PAYMENTS MADE FOR:  
Interest$1,969 $1,135 
Income taxes$985 $4,132 
NONCASH SUPPLEMENTAL DISCLOSURES:  
Investment in Wakefern and increase in notes payable to Wakefern$66 $93 
Capital expenditures included in accounts payable and accrued expenses$5,138 $5,453 
See notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited)


1. 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 January 23, 2021 and the consolidated statements of operations, comprehensive income and cash flows for the 13 and 26 weeks ended January 23, 2021 and January 25, 2020 of Village Super Market, Inc. (“Village” or the “Company”).

The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July 25, 2020 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with these financial statements.  The results of operations for the periods ended January 23, 2021 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 Ended26 Weeks Ended
 January 23, 2021January 25, 2020January 23, 2021January 25, 2020
Amount%Amount%Amount%Amount%
Center Store (1)$321,829 61.5 %$272,775 62.4 %$617,769 61.0 %$520,832 61.6 %
Fresh (2)181,965 34.8 145,500 33.3 357,609 35.3 286,180 33.9 
Pharmacy16,671 3.2 17,710 4.0 33,103 3.3 35,234 4.2 
Other (3)2,353 0.5 1,437 0.3 4,473 0.4 2,578 0.3 
Total Sales$522,818 100.0 %$437,422 100.0 %$1,012,954 100.0 %$844,824 100.0 %
(1) Consists primarily of grocery, dairy, frozen, health and beauty care, general merchandise and liquor.
(2) Consists primarily of produce, meat, deli, seafood, bakery, prepared foods and floral.
(3) Consists primarily of sales related to other income streams, including ShopRite from Home service fees, gift card and lottery commissions and wholesale sales.



2. MERCHANDISE INVENTORIES
    
    At both January 23, 2021 and July 25, 2020, approximately 63% 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 $15,101 higher than reported at both January 23, 2021 and July 25, 2020.


3. NET INCOME PER SHARE

    The Company has two classes of common stock. Class A common stock is entitled to cash dividends as declared 54% greater than those paid on Class B common stock. Shares of Class B common stock are convertible on a share-for-share basis for Class A common stock at any time.

    The Company utilizes the two-class method of computing and presenting net income per share. The two-class method is an earnings allocation formula that calculates basic and diluted net income per share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings. Under the two-class method, Class A common stock is assumed to receive a 54% greater participation in undistributed earnings than Class B common stock, in accordance with the classes' respective dividend rights. Unvested share-based payment awards that contain nonforfeitable rights to dividends are treated as participating securities and therefore included in computing net income per share using the two-class method.

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    Diluted net income per share for Class A common stock is calculated utilizing the if-converted method, which assumes the conversion of all shares of Class B common stock to Class A common stock on a share-for-share basis, as this method is more dilutive than the two-class method. Diluted net income per share for Class B common stock does not assume conversion of Class B common stock to shares of Class A common stock.

    The tables below reconcile the numerators and denominators of basic and diluted net income per share for all periods presented.
 
13 Weeks Ended26 Weeks Ended
 January 23, 2021January 23, 2021
 Class AClass BClass AClass B
Numerator:    
Net income allocated, basic$3,437 $974 $5,971 $1,692 
Conversion of Class B to Class A shares974  1,692  
Net income allocated, diluted$4,411 $974 $7,663 $1,692 
Denominator:    
Weighted average shares outstanding, basic9,850 4,294 9,850 4,294 
Conversion of Class B to Class A shares4,294  4,294  
Weighted average shares outstanding, diluted14,144 4,294 14,144 4,294 
13 Weeks Ended26 Weeks Ended
 January 25, 2020January 25, 2020
 Class AClass BClass AClass B
Numerator:    
Net income allocated, basic$1,521 $435 $3,461 $993 
Conversion of Class B to Class A shares435  993  
Effect of share-based compensation on allocated net income(3)(1)(5)(2)
Net income allocated, diluted$1,953 $434 $4,449 $991 
Denominator:    
Weighted average shares outstanding, basic9,768 4,294 9,769 4,294 
Conversion of Class B to Class A shares4,294  4,294  
Weighted average shares outstanding, diluted14,062 4,294 14,063 4,294 

    Outstanding stock options to purchase Class A shares of 156 and 157 were excluded from the calculation of diluted net income per share at January 23, 2021 and January 25, 2020, respectively, as a result of their anti-dilutive effect. In addition, 413 and 316 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 23, 2021 and January 25, 2020, respectively, due to their anti-dilutive effect.












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4. PENSION PLANS

Net periodic pension cost for the three defined benefit pension plans sponsored in fiscal 2021 and the four defined benefit pension plans sponsored in fiscal 2020 includes the following components:
13 Weeks Ended26 Weeks Ended
January 23,
2021
January 25,
2020
January 23,
2021
January 25,
2020
Service cost$54 $50 $108 $101 
Interest cost on projected benefit obligations422 566 844 1,131 
Expected return on plan assets(483)(625)(966)(1,328)
Loss on settlement 1,246  1,246 
Amortization of net losses147 146 294 291 
Net periodic pension cost$140 $1,383 $280 $1,441 
    
On December 23, 2019, the Company terminated the Village Super Market, Inc. Retail Clerks Employees’ Retirement Plan. All participants of the plan were former employees of a store previously closed in 1994. An annuity contract totaling $1,302 was purchased with an insurance company for all participants who did not elect a lump sum distribution. Additionally, lump sum distributions related to the termination totaled $451. The plan had sufficient assets to satisfy all termination transaction obligations, and no benefit obligation or plan assets related to the Village Super Market, Inc. Retail Clerks Employees’ Retirement Plan remained as of the termination date. As a result of this termination, the Company recognized a non-cash pre-tax settlement charge totaling $669 during the 13 weeks ended January 25, 2020. This settlement charge represents the plan’s remaining unrecognized losses within accumulated other comprehensive loss as of the termination date.
Additionally, the Company recognized a settlement loss of $577 in the 13 weeks ended January 25, 2020 for a plan where benefits paid exceeded the sum of the service cost and interest cost components of net periodic pension cost. Assumptions used in the related remeasurement include a discount rate of 3.00% and long term expected rate of return on plan assets of 5.00%.
    As of January 23, 2021, the Company has not made any contributions to its pension plans in fiscal 2021.  The Company expects contributions to its defined benefit pension plans to be immaterial in fiscal 2021.

5. RELATED PARTY INFORMATION
 
    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 25, 2020.  
        
    Included in cash and cash equivalents at January 23, 2021 and July 25, 2020 are $82,042 and $76,259, 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 23, 2021.

6. COMMITMENTS and CONTINGENCIES

    The Company is involved in other litigation incidental to the normal course of business. Company management is of the opinion that the ultimate resolution of these legal proceedings should not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.




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7. DEBT

Long-term debt consists of:
January 23,
2021
July 25,
2020
Unsecured revolving line of credit$ $50,000 
Secured term loan48,679  
Unsecured term loan22,900 24,694 
New Market Tax Credit Financing 5,798 5,921 
Total debt, excluding obligations under leases77,377 80,615 
Less current portion6,976 6,421 
Total long-term debt, excluding obligations under leases$70,401 $74,194 

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

An unsecured revolving line of credit providing a maximum amount available for borrowing of $125,000. 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. 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 January 23, 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 January 23, 2021.

New Markets Tax Credit Financing

On December 29, 2017, the Company entered into a financing transaction with Wells Fargo Community Investment Holdings, LLC (“Wells Fargo”) under a qualified New Markets Tax Credit (“NMTC”) program related to the construction of a new store in the Bronx, New York. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) and is intended to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their Federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments.
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In connection with the financing, the Company loaned $4,835 to VSM Investment Fund, LLC (the "Investment Fund") at an interest rate of  1.403% per year and with a maturity date of December 31, 2044.  Repayments on the loan commence in March 2025. Wells Fargo contributed $2,375 to the Investment Fund and, by virtue of such contribution, is entitled to substantially all of the tax benefits derived from the NMTC. The Investment Fund is a wholly owned subsidiary of Wells Fargo.  The loan to the Investment Fund is recorded in other assets in the consolidated balance sheets.

The Investment Fund then contributed the proceeds to a CDE, which, in turn, loaned combined funds of $6,563, net of debt issuance costs, to Village Super Market of NY, LLC, a wholly-owned subsidiary of the Company, at an interest rate of 1.000% per year with a maturity date of December 31, 2051. These loans are secured by the leasehold improvements and equipment related to the construction of the Bronx store. Repayment of the loans commences in March 2025. The proceeds of the loans from the CDE were used to partially fund the construction of the Bronx store. The Notes payable related to New Markets Tax Credit, net of debt issuance costs, are recorded in long-term debt in the consolidated balance sheets.

The NMTC is subject to 100% recapture for a period of seven years. The Company is required to be in compliance with various regulations and contractual provisions that apply to the New Markets Tax Credit arrangement. Noncompliance could result in Wells Fargo's projected tax benefits not being realized and, therefore, require the Company to indemnify Wells Fargo for any loss or recapture of NMTCs. The Company does not anticipate any credit recapture will be required in connection with this financing arrangement. The transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase Wells Fargo's interest in the Investment Fund. The value attributed to the put/call is de minimis. We believe that Wells Fargo will exercise the put option in December 2024, at the end of the recapture period, that will result in a net benefit to the Company of $1,728. The Company is recognizing the net benefit over the seven-year compliance period in operating and administrative expense.

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

The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements. 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. 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 Company's derivatives qualify and have been designated as cash flow hedges of interest rate risk. The gain or loss on the derivative is recorded in Accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. 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 $82 and $148 during the 13 and 26 weeks ended January 23, 2021, respectively, from Accumulated other comprehensive loss to Interest expense.

The notional value of the interest rate swaps were $71,960 as of January 23, 2021. The fair value of interest rate swaps recorded in other assets is $652 as of January 23, 2021.

9. BUSINESS ACQUISITION

On May 14, 2020, Village completed its acquisition of certain assets, including five supermarkets averaging 52,000 sq. ft. (30,000 selling sq. ft.), a production distribution center (the “PDC”) and the intellectual property of Fairway Group Holdings Corp. and certain of its subsidiaries (“Fairway”), including the names “Fairway” and “Fairway Markets.” Four of the supermarkets are in Manhattan, specifically the Upper West Side, Upper East Side, Kips Bay and Chelsea locations, and a fifth store is located in Pelham, NY. The acquisition was effectuated pursuant to the Asset Purchase Agreement (the "APA"), entered into on January 20, 2020, revised on March 25, 2020 and approved by the United States Bankruptcy Court for the Southern District of New York through a Sale Order entered on April 20, 2020. Village paid $73,622 for the Fairway assets, net
12


of cash acquired, and assumed certain liabilities, consisting primarily of those arising from acquired leases. Additionally, at the time of closing Village received a $2,035 credit arising from the breakup of Village’s initial “stalking horse” bid under the January 20, 2020 Asset Purchase Agreement. The credit was recognized as a reduction in operating and administrative expense in the fourth quarter of fiscal 2020. The Fairway acquisition expands our presence in New York City under an iconic city brand and provides Village the ability to expand centralized food production to support stores under all of our banners.

Village accounted for this transaction as a business combination in accordance with the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. In connection with this acquisition, the Company recorded $11,540 of goodwill attributable to the assembled workforce and cost synergies. The goodwill related to this acquisition is deductible for tax purposes. Additionally, the Company recorded a $14,200 indefinite-lived intangible asset related to the trade name. The fair value of the intangible asset was determined based on the discounted cash flow model using the relief from royalty method. The fair value of the property, equipment and fixtures were determined based on the indirect cost approach in which current costs that were not new were adjusted for all forms of depreciation. The Company also evaluated the fair value of the leases assumed in the acquisition, which evaluated comparable rents in the areas of the locations. Leases were determined to be at market apart from one location. For this location, the Company recorded a favorable lease of $4,360 within operating lease assets. The favorable lease is being amortized over the remaining duration of the lease. Transaction costs were expensed as incurred. The allocation of the purchase price consideration to the assets acquired and the liabilities assumed will be completed upon the finalization of working capital adjustments.


10.