Net income was $6,729,000 in the fourth quarter of fiscal 2019 compared to $6,011,000 in the fourth quarter of fiscal 2018. The fourth quarter of fiscal 2019 includes a tax benefit of $777,000 related to the favorable settlement of a tax audit with the New Jersey Division of Taxation. Fiscal 2018 includes an $822,000 (net of tax) non-recurring credit accrued related to multi-employer pension benefits, $671,000 (net of tax) in non-recurring assessments from Wakefern and $551,000 (net of tax) in pre-opening costs related to the Bronx, New York City store. Excluding these items from both periods, net income decreased 7% in fiscal 2019 compared to the prior year primarily due to increased operating and administrative expenses partially offset by the favorable impact of the Tax Act.

Sales were $418,366,000 in the fourth quarter of fiscal 2019 compared to $413,999,000 in the fourth quarter of fiscal 2018. Sales increased due to the opening of the Bronx, New York City store on June 28, 2018 and the acquisition of Gourmet Garage on June 24, 2019 partially offset by a decrease in same store sales of 0.9%. Same store sales decreased due primarily to three competitor store openings. Village acquired the assets and certain liabilities of Gourmet Garage for $5,267,000. Gourmet Garage operates three small format specialty markets in Manhattan, New York City. New stores and replacement stores are included in same store sales in the quarter after the store has been in operation for four full quarters. Store renovations and expansions are included in same store sales immediately.

Operating and administrative expense as a percentage of sales increased to 24.16% in the fourth quarter of fiscal 2019 compared to 24.01% in the fourth quarter of fiscal 2018. The fourth quarter of fiscal 2018 included non-recurring assessments from Wakefern (.24%), pre-opening costs related to the Bronx, NY store (.20%) and credits received related to multi-employer pension benefits (.30%). Excluding these items, operating and administrative expense as a percentage of sales increased .29% in the fourth quarter of fiscal 2019 compared to the fourth quarter of fiscal 2018 due primarily to increased payroll costs (.43%) and higher self-insured workers compensation claim costs (.22%) partially offset by decreased legal and consulting fees (.26%) and lower non-union pension expense (.18%). Payroll costs increased due primarily to reduced operating leverage as a result of the decrease in same store sales, increased investments in training, operational proficiency and other strategic initiatives.

Net income was $25,539,000 in fiscal 2019 compared to $25,080,000 in fiscal 2018. Fiscal 2019 includes a $290,000 (net of tax) gain for Superstorm Sandy insurance proceeds received and a tax benefit of $777,000 related to the favorable settlement of a tax audit with the New Jersey Division of Taxation. Fiscal 2018 includes a $3,300,000 reduction in deferred tax expense as a result of the Tax Act, an $822,000 (net of tax) non-recurring credit accrued related to multi-employer pension benefits, $877,000 (net of tax) in non-recurring assessments from Wakefern and $695,000 (net of tax) in pre-opening costs related to the Bronx, New York City store. Excluding these items from both periods, net income increased 9% in fiscal 2019 compared to the prior year primarily due to higher gross profit margins and the favorable impact of the Tax Act.

Sales were $1,643,502,000 in fiscal 2019 compared to $1,615,045,000 in fiscal 2018. Sales increased due to the opening of the Bronx, New York City store on June 28, 2018 and the acquisition of Gourmet Garage on June 24, 2019 partially offset by a same store sales decrease of 0.5%. Same store sales decreased due primarily to the impact of three competitor store openings partially offset by continued sales growth in recently replaced and remodeled stores. New stores and replacement stores are included in same store sales in the quarter after the store has been in operation for four full quarters. Store renovations and expansions are included in same store sales immediately.

Operating and administrative expense as a percentage of sales increased to 24.02% in fiscal 2019 compared to 23.81% in fiscal 2018. Fiscal 2019 includes a gain for Superstorm Sandy insurance proceeds received (.03%) and fiscal 2018 included non-recurring assessments from Wakefern (.08%), pre-opening costs related to the Bronx, NY store (.06%) and credits received related to multi-employer pension benefits (.08%). Excluding these items, operating and administrative expense as a percentage of sales increased .30% in fiscal 2019 compared to fiscal 2018 due primarily to increased payroll and fringe benefit costs (.32%) and self-insured workers compensation claim costs (.08%) partially offset by decreased legal and consulting fees (.12%). Payroll costs increased due primarily to reduced operating leverage as a result of the decrease in same store sales, increased training costs and investments in operational proficiency and other strategic initiatives.

All statements, other than statements of historical fact, included in this Press Release are or may be considered forward-looking statements within the meaning of federal securities law. The Company cautions the reader that there is no assurance that actual results or business conditions will not differ materially from future results, whether expressed, suggested or implied by such forward-looking statements. The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof. The following are among the principal factors that could cause actual results to differ from the forward-looking statements: 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 changing energy prices; increased cost of goods sold, including increased costs from the Company's principal supplier, Wakefern; disruptions or changes in Wakefern's operations; the results of litigation; the results of tax examinations; the results of union contract negotiations; competitive store openings and closings; the rate of return on pension assets; and other factors detailed herein and in the Company's filings with the SEC.