Weis Markets Inc 10-Q for FY2020 Q3

Weis Markets Inc (WMK)

10-Q 2020-11-05 For: 2020-09-26

Added on April 08, 2026

About this 10-Q

Weis Markets Inc filed this 10-Q on November 5, 2020, covering the quarter ended September 26, 2020 (FY2020 Q3).

Headline figures

Quarter ended September 26, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1B; up 14.4% from $876.22M a year earlier
Net income: $31.34M; up 118.8% from net income of $14.32M a year earlier

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[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 26, 2020
	or
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________to_________
	Commission File Number 1-5039


Large accelerated filer [ ]		Accelerated filer [X]
Non-accelerated filer [ ]		Smaller reporting company [ ]
		Emerging growth company [ ]


Title of each class	Trading symbol	Name of exchange on which registered
Common stock, no par value	WMK	New York Stock Exchange


FORM 10-Q	Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets	1
Consolidated Statements of Income	2
Consolidated Statements of Comprehensive Income	3
Consolidated Statements of Shareholders’ Equity	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures about Market Risk	18
Item 4. Controls and Procedures	18
Part II. Other Information
Item 1a. Risk Factors	19
Item 6. Exhibits	20
Signatures	21
Exhibit 31.1 Rule 13a-14(a) Certification - CEO
Exhibit 31.2 Rule 13a-14(a) Certification - CFO
Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350


(dollars in thousands)	September 26, 2020		December 28, 2019
Assets
Current:
Cash and cash equivalents	$	117,408	$	66,871
Marketable securities		102,449		63,538
SERP investment		20,362		18,935
Accounts receivable, net		50,726		55,764
Inventories		265,990		279,806
Prepaid expenses and other current assets		29,810		23,378
Total current assets		586,745		508,292
Property and equipment, net		897,768		886,928
Operating lease right-to-use		202,058		210,196
Goodwill		52,330		52,330
Intangible and other assets, net		17,832		17,816
Total assets	$	1,756,733	$	1,675,562

Liabilities
Current:
Accounts payable	$	188,714	$	180,718
Accrued expenses		38,300		39,528
Operating leases		39,297		39,114
Accrued self-insurance		19,029		15,719
Deferred revenue, net		6,539		8,662
Income taxes payable		8,783		8,197
Total current liabilities		300,662		291,938
Postretirement benefit obligations		23,136		22,143
Accrued self-insurance		17,612		17,625
Operating leases		171,125		179,654
Deferred income taxes		100,863		97,041
Other		8,629		8,416
Total liabilities		622,027		616,817
Shareholders’ Equity
Common stock, no par value, 100,800,000 shares authorized, 33,047,807 shares issued,
26,898,443 shares outstanding		9,949		9,949
Retained earnings		1,272,655		1,198,173
Accumulated other comprehensive income
(Net of deferred taxes of $1,168 in 2020 and $593 in 2019)		2,959		1,480
		1,285,563		1,209,602
Treasury stock at cost, 6,149,364 shares		(150,857)		(150,857)
Total shareholders’ equity		1,134,706		1,058,745
Total liabilities and shareholders’ equity	$	1,756,733	$	1,675,562


Registrant's telephone number, including area code: (570) 286-4571	Registrant's web address: www.weismarkets.com



	13 Weeks Ended				39 Weeks Ended
(dollars in thousands, except shares and per share amounts)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net sales	$	1,002,387	$	876,222	$	3,086,910	$	2,640,907
Cost of sales, including advertising, warehousing and distribution expenses		728,054		643,397		2,255,544		1,941,860
Gross profit on sales		274,333		232,825		831,366		699,047
Operating, general and administrative expenses		231,527		215,282		695,130		637,385
Income from operations		42,806		17,543		136,236		61,662
Investment income (loss) and interest expense		1,890		1,467		937		5,441
Other income (expense)		(1,218)		(39)		(1,160)		(2,309)
Income before provision for income taxes		43,478		18,971		136,013		64,794
Provision for income taxes		12,142		4,652		36,516		15,696
Net income	$	31,336	$	14,319	$	99,497	$	49,098

Weighted-average shares outstanding, basic and diluted		26,898,443		26,898,443		26,898,443		26,898,443
Cash dividends per share	$	0.31	$	0.31	$	0.93	$	0.93
Basic and diluted earnings per share	$	1.16	$	0.53	$	3.70	$	1.83



						Accumulated
(dollars in thousands, except shares)						Other						Total
For Thirteen Weeks Ended	Common Stock			Retained		Comprehensive		Treasury Stock				Shareholders’
September 26, 2020 and September 28, 2019	Shares	Amount		Earnings		Income (Loss)		Shares		Amount		Equity
Balance at June 27, 2020	33,047,807	$	9,949	$	1,249,657	$	2,598		6,149,364	$	(150,857)	$	1,111,347
Net Income	—		—		31,336		—		—		—		31,336
Other comprehensive income, net of
reclassification adjustments and tax	—		—		—		362		—		—		362
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at September 26, 2020	33,047,807	$	9,949	$	1,272,655	$	2,959		6,149,364	$	(150,857)	$	1,134,706

Balance at June 29, 2019	33,047,807	$	9,949	$	1,181,647		1,337		6,149,364	$	(150,857)	$	1,042,076
Net income	—		—		14,319		—		—		—		14,319
Other comprehensive income, net of
reclassification adjustments and tax	—		—		—		127		—		—		127
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at September 28, 2019	33,047,807	$	9,949	$	1,187,627	$	1,465		6,149,364	$	(150,857)	$	1,048,184



			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
September 26, 2020	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	7,308
Level 2
Municipal bonds	$	91,013	$	5,346	$	(1,218)		95,141
	$	91,013	$	5,346	$	(1,218)	$	102,449



		Unrealized Gains
		on Available-for-Sale
(dollars in thousands)		Marketable Securities
Accumulated other comprehensive income balance as of December 28, 2019	$	1,480

Other comprehensive income before reclassifications		1,479
Amounts reclassified from accumulated other comprehensive income		-
Net current period change in other comprehensive income		1,479
Accumulated other comprehensive income balance as of September 26, 2020	$	2,959



		Amounts Reclassified from
		Accumulated Other Comprehensive Income to the
		Consolidated Statements of Income
		13 Weeks Ended				39 Weeks Ended
(dollars in thousands)	Location	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Unrealized gains (losses) on available-for-sale marketable securities
	Investment income (loss) and interest expense	$	-	$	(55)	$	-	$	(55)
	Provision for income taxes		-		16		-		16
Total amount reclassified, net of tax		$	-	$	(39)	$	-	$	(39)



Analysis of Consolidated Statements of Income
													Percentage Changes
	13 Weeks Ended						39 Weeks Ended						2020 vs. 2019			2020 vs. 2019
(dollars in thousands except per share amounts)	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019			13 Weeks Ended			39 Weeks Ended
Net sales	$	1,002,387		$	876,222		$	3,086,910		$	2,640,907			14.4	%		16.9	%
Cost of sales, including advertising, warehousing and distribution expenses		728,054			643,397			2,255,544			1,941,860			13.2			16.2
Gross profit on sales		274,333			232,825			831,366			699,047			17.8			18.9
Gross profit margin		27.4	%		26.6	%		26.9	%		26.5	%
Operating, general and administrative expenses		231,527			215,282			695,130			637,385			7.5			9.1
O, G & A, percent of net sales		23.1	%		24.6	%		22.5	%		24.1	%
Income from operations		42,806			17,543			136,236			61,662			144.0			120.9
Operating margin		4.3	%		2.0	%		4.4	%		2.3	%
Investment income and interest expense		1,890			1,467			937			5,441			28.8			(82.8)
Investment income and interest expense, percent of net sales		0.2	%		0.2	%		0.0	%		0.2	%
Other income (expense)		(1,218)			(39)			(1,160)			(2,309)			3023.1			(49.8)
Other income (expense), percent of net sales		(0.1)	%		0.0	%		0.0	%		(0.1)	%
Income before provision for income taxes		43,478			18,971			136,013			64,794			129.2			109.9
Income before provision for income taxes, percent of net sales		4.3	%		2.2	%		4.4	%		2.5	%
Provision for income taxes		12,142			4,652			36,516			15,696			161.0			132.6
Effective income tax rate		27.9	%		24.5	%		26.8	%		24.2	%
Net income	$	31,336		$	14,319		$	99,497		$	49,098			118.8	%		102.6	%
Net income, percent of net sales		3.1	%		1.6	%		3.2	%		1.9	%
Basic and diluted earnings per share	$	1.16		$	0.53		$	3.70		$	1.83			118.9	%		102.2	%


A breakdown of the material increases (decreases) as a percent of sales in "Operating, general and administrative expenses" is as follows:

	13 Weeks Ended
(dollars in thousands)	Increase		Increase (Decrease)
September 26, 2020	(Decrease)		as a % of sales
Wages expense	$	6,495	(0.9)	%
Fixed expense		3,713	(0.3)
Utilities expense		(345)	(0.2)


	Exhibit 31.1 Rule a-14(a) Certification - CEO
	Exhibit 31.2 Rule 13a-14(a) Certification - CFO
	Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350


		WEIS MARKETS, INC.
		(Registrant)

Date:	11/5/2020	/S/Jonathan H. Weis
		Jonathan H. Weis
		Chairman,
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	11/5/2020	/S/Scott F. Frost
		Scott F. Frost
		Senior Vice President, Chief Financial Officer
		and Treasurer
		(Principal Financial Officer)


	39 Weeks Ended
(dollars in thousands)		September 26, 2020		September 28, 2019
Cash flows from operating activities:
Net income	$	99,497	$	49,098
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		74,003		69,857
Loss on disposition of fixed assets		2,618		1,137
(Gain) on sale of marketable securities		-		(55)
Unrealized (gain) loss in value of equity securities		1,892		(1,637)
Deferred income taxes		3,247		1,483
Unrealized (gain) in SERP		(760)		(1,289)
Changes in operating assets and liabilities:
Inventories		13,816		17,519
Accounts receivable and prepaid expenses		(1,393)		7,205
Accounts payable and other liabilities		4,694		(9,153)
Income taxes		587		3,610
Other		(4,020)		972
Net cash provided by operating activities		194,181		138,747
Cash flows from investing activities:
Purchase of property and equipment		(83,574)		(70,084)
Proceeds from the sale of property and equipment		308		1,489
Purchase of marketable securities		(38,259)		(9,220)
Proceeds from the sale and maturities of marketable securities		3,690		5,325
Purchase of intangible assets		(127)		(558)
Change in SERP investment		(666)		(1,910)
Net cash used in investing activities		(118,628)		(74,958)
Cash flows from financing activities:
Dividends paid		(25,016)		(25,016)
Net cash used in financing activities		(25,016)		(25,016)
Net increase in cash and cash equivalents		50,537		38,773
Cash and cash equivalents at beginning of year		66,871		37,808
Cash and cash equivalents at end of period	$	117,408	$	76,581


		Amortized		Fair
(dollars in thousands)		Cost		Value
Available-for-sale:
Due within one year	$	10,561	$	10,649
Due after one year through five years		37,659		39,421
Due after five years through ten years		42,793		45,071
	$	91,013	$	95,141


	13 Weeks Ended
(dollars in thousands)	September 26, 2020				September 28, 2019
Grocery	$	878,378	87.7	%	$	754,872	86.1	%
Pharmacy		89,306	8.9			84,632	9.7
Fuel		32,275	3.2			34,041	3.9
Manufacturing		2,428	0.2			2,677	0.3

Total net sales	$	1,002,387	100.0	%	$	876,222	100.0	%


	39 Weeks Ended
(dollars in thousands)	September 26, 2020				September 28, 2019
Grocery	$	2,729,626	88.4	%	$	2,289,658	86.7	%
Pharmacy		264,448	8.6			251,095	9.5
Fuel		85,370	2.8			93,777	3.6
Manufacturing		7,466	0.2			6,377	0.2

Total net sales	$	3,086,910	100.0	%	$	2,640,907	100.0	%