UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

	[X]
~~[X]~~	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 24, 2022

	[ ]	~~For the quarterly period ended~~ ~~September 30, 2017~~
	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~~

For the transition period from __________to_________

Commission File Number 1-5039

WEIS MARKETS, INC.

(Exact name of registrant as specified in its charter)


Pennsylvania		24-0755415
~~PENNSYLVANIA~~ (State or other jurisdiction of incorporation or organization)		~~24-0755415~~ (I.R.S. Employer Identification No.)

1000 S. Second Street
P. O. Box 471		17801-0471
Sunbury, Pennsylvania		(Zip Code)
(Address of principal executive offices)		~~17801-0471~~ ~~(Zip Code)~~


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

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer [ ]		Accelerated filer [X]
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 [X]

Securities registered pursuant to section 12(b) of the act:


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

As of November ~~7, 2017,~~3, 2022, there were issued and outstanding 26,898,443 shares of the registrant’s common stock.

WEIS MARKETS, INC.

TABLE OF CONTENTS


FORM 10-Q
~~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	4
~~Notes to Consolidated Financial Statements~~	5
Notes to Consolidated Financial Statements		6
Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	9	10
Item 3. Quantitative and Qualitative Disclosures about Market Risk	16	18
Item 4. Controls and Procedures	16	18
Part II. Other Information
Item 6. Exhibits	17	19
Signatures	17	20
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

Table of Contents

WEIS MARKETS, INC.

PART I – FINANCIAL INFORMATION

ITEM I – FINANCIAL STATEMENTS

~~WEIS MARKETS, INC.~~

CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

September 30, 2017

December 31, 2016
Assets

Current:

Cash and cash equivalents
$
20,154

$
14,653
Marketable securities

63,921

67,171
SERP investment

13,607

11,154
Accounts receivable, net

71,629

96,170
Inventories

268,170

276,783
Prepaid expenses and other current assets

20,134

16,310
Income taxes recoverable

1,748

1,625
Total current assets

459,363

483,866
Property and equipment, net

874,777

878,195
Goodwill

52,330

52,330
Intangible and other assets, net

19,478

16,913
Total assets
$
1,405,948

$
1,431,304

Liabilities

Current:

Accounts payable
$
186,580

$
199,159
Accrued expenses

34,744

50,947
Accrued self-insurance

14,121

19,330
Deferred revenue, net

4,931

6,730
Total current liabilities

240,376

276,166
Long-term debt

52,086

64,476
Postretirement benefit obligations

16,343

15,277
Accrued self-insurance

21,671

21,353
Deferred income taxes

128,377

119,445
Other

9,671

7,865
Total liabilities

468,524

504,582
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

1,073,330

1,062,778
Accumulated other comprehensive income

(Net of deferred taxes of $3,452 in 2017 and $3,382 in 2016)

5,002

4,852

1,088,281

1,077,579
Treasury stock at cost, 6,149,364 shares

(150,857)

(150,857)
Total shareholders’ equity

937,424

926,722
Total liabilities and shareholders’ equity
$
1,405,948

$
1,431,304


(amounts in thousands, except shares)	September 24, 2022		December 25, 2021
Assets
Current:
Cash and cash equivalents	$	144,603	$	86,048
Marketable securities		171,136		205,744
SERP investment		21,483		27,059
Accounts receivable, net		53,406		52,108
Inventories		300,087		269,587
Prepaid expenses and other current assets		33,503		31,112
Total current assets		724,218		671,658
Property and equipment, net		963,498		977,787
Operating lease right-to-use		181,722		191,175
Goodwill		52,330		52,330
Intangible and other assets, net		18,960		17,525
Total assets	$	1,940,728	$	1,910,475

Liabilities
Current:
Accounts payable	$	206,472	$	218,774
Accrued expenses		52,540		48,654
Operating leases		42,204		39,940
Accrued self-insurance		18,739		18,568
Deferred revenue, net		8,114		11,901
Income taxes payable		16,608		7,360
Total current liabilities		344,677		345,197
Postretirement benefit obligations		23,842		29,964
Accrued self-insurance		23,371		23,400
Operating leases		149,019		161,669
Deferred income taxes		110,006		115,087
Other		8,724		15,416
Total liabilities		659,639		690,733
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		1,429,453		1,358,963
Accumulated other comprehensive income (Net of deferred taxes of $2,702 in 2022 and $669 in 2021)		(7,456)		1,687
		1,431,946		1,370,599
Treasury stock at cost, 6,149,364 shares		(150,857)		(150,857)
Total shareholders’ equity		1,281,089		1,219,742
Total liabilities and shareholders’ equity	$	1,940,728	$	1,910,475

See accompanying notes to Consolidated Financial Statements.

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

13 Weeks Ended
39 Weeks Ended
(dollars in thousands, except shares and per share amounts)
September 30, 2017
September 24, 2016
September 30, 2017
September 24, 2016
Net sales
$
854,261

$
742,986

$
2,583,059

$
2,211,622

Cost of sales, including warehousing and distribution expenses

631,422

538,122

1,890,545

1,597,709

Gross profit on sales

222,839

204,864

692,514

613,913

Operating, general and administrative expenses

216,645

188,901

638,352

542,624

Income from operations

6,194

15,963

54,162

71,289

Investment income and interest expense

657

666

1,893

1,985

Income before provision for income taxes

6,851

16,629

56,055

73,274

Provision for income taxes

2,402

6,001

21,295

27,253

Net income
$
4,449

$
10,628

$
34,760

$
46,021

Weighted-average shares outstanding, basic and diluted

26,898,443

26,898,443

26,898,443

26,898,443

Cash dividends per share
$
0.30

$
0.30

$
0.90

$
0.90

Basic and diluted earnings per share
$
0.16

$
0.40

$
1.29

$
1.71


		13 Weeks Ended			39 Weeks Ended
(amounts in thousands, except shares and per share amounts)		September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Net sales	$	1,150,551	$	1,063,452	$	3,389,853	$	3,117,141
Cost of sales, including advertising, warehousing and distribution expenses		862,908		780,320		2,516,311		2,285,428
Gross profit on sales		287,643		283,132		873,542		831,713
Operating, general and administrative expenses		253,985		244,164		750,066		715,353
Income from operations		33,658		38,968		123,476		116,360
Investment income (loss) and interest expense		(1,483)		608		(3,394)		4,360
Other income (expense)		1,214		(401)		4,805		(3,007)
Income before provision for income taxes		33,389		39,175		124,887		117,713
Provision for income taxes		4,731		10,668		28,574		31,479
Net income	$	28,658	$	28,507	$	96,313	$	86,234

Weighted-average shares outstanding, basic and diluted		26,898,443		26,898,443		26,898,443		26,898,443
Cash dividends per share	$	0.32	$	0.31	$	0.96	$	0.93
Basic and diluted earnings per share	$	1.07	$	1.06	$	3.58	$	3.21

See accompanying notes to Consolidated Financial Statements.

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

13 Weeks Ended
39 Weeks Ended
(dollars in thousands)
September 30, 2017
September 24, 2016
September 30, 2017
September 24, 2016
Net income
$
4,449

$
10,628

$
34,760

$
46,021

Other comprehensive income (loss) by component, net of tax:

Available-for-sale marketable securities

Unrealized holding gains (losses) arising during period

(Net of deferred taxes of $194 and $184, respectively for the 13 Weeks Ended and $68 and $738, respectively for the 39 Weeks Ended)

281

(303)

147

1,019

Reclassification adjustment for (gains) losses included in net income

(Net of deferred taxes of $2 and $70, respectively for the 13 Weeks Ended and $2 and $181, respectively for the 39 Weeks Ended

3

(99)

3

(257)

Other comprehensive income (loss), net of tax

284

(402)

150

762

Comprehensive income, net of tax
$
4,733

$
10,226

$
34,910

$
46,783


	13 Weeks Ended				39 Weeks Ended
(amounts in thousands)		September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Net income	$	28,658	$	28,507	$	96,313	$	86,234
Other comprehensive income (loss) by component, net of tax:
Available-for-sale marketable securities
Unrealized holding gains (losses) arising during period (Net of deferred taxes of $547 and $39, respectively for the thirteen weeks ended, and $3,370 and $268, respectively for the thirty-nine weeks ended)		(2,023)		(103)		(9,143)		(683)
Other comprehensive income gain (loss), net of tax		(2,023)		(103)		(9,143)		(683)
Comprehensive income, net of tax	$	26,635	$	28,404	$	87,170	$	85,551

See accompanying notes to Consolidated Financial Statements.

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~SHAREHOLDERS’ EQUITY

(unaudited)

39 Weeks Ended
(dollars in thousands)
September 30, 2017
September 24, 2016
Cash flows from operating activities:

Net income
$
34,760
$
46,021
Adjustments to reconcile net income to

net cash provided by operating activities:

Depreciation and amortization

63,523

56,198
(Gain) loss on disposition of fixed assets

(1,036)

690
(Gain) loss on sale of marketable securities

5

(438)
Gain on sale of intangible assets

-

(200)
Deferred income taxes

8,862

(2,628)
Changes in operating assets and liabilities:

Inventories

8,613

3,333
Accounts receivable and prepaid expenses

20,147

10,783
Accounts payable and other liabilities

(27,702)

(2,675)
Income taxes

(123)

(114)
Other

(1,326)

970
Net cash provided by operating activities

105,723

111,940
Cash flows from investing activities:

Purchase of property and equipment

(65,356)

(96,659)
Proceeds from the sale of property and equipment

2,195

281
Purchase of marketable securities

(11,254)

(29,277)
Proceeds from maturities of marketable securities

7,402

835
Proceeds from the sale of marketable securities

7,257

42,516
Acquisitions

-

(47,547)
Purchase of intangible assets

(1,414)

(1,697)
Proceeds from sale of intangible assets

-

200
Change in SERP investment

(2,453)

(1,570)
Net cash used in investing activities

(63,623)

(132,918)
Cash flows from financing activities:

Proceeds from (payments on) long-term debt

(12,390)

40,139
Dividends paid

(24,209)

(24,209)
Net cash (used in) provided by financing activities

(36,599)

15,930
Net increase (decrease) in cash and cash equivalents

5,501

(5,048)
Cash and cash equivalents at beginning of year

14,653

17,596
Cash and cash equivalents at end of period
$
20,154
$
12,548


						Accumulated
(amounts in thousands, except shares)						Other						Total
For the Thirteen Weeks Ended	Common Stock			Retained		Comprehensive		Treasury Stock				Shareholders’
September 24, 2022 and September 25, 2021	Shares	Amount		Earnings		Income (Loss)		Shares		Amount		Equity
Balance at June 25, 2022	33,047,807	$	9,949	$	1,409,403	$	(5,433)		6,149,364	$	(150,857)	$	1,263,062
Net Income	—		—		28,658		—		—		—		28,658
Other comprehensive income (loss), net of tax	—		—		—		(2,023)		—		—		(2,023)
Dividends paid	—		—		(8,608)		—		—		—		(8,608)
Balance at September 24, 2022	33,047,807	$	9,949	$	1,429,453	$	(7,456)		6,149,364	$	(150,857)	$	1,281,089

Balance at June 26, 2021	33,047,807	$	9,949	$	1,324,787	$	2,706		6,149,364	$	(150,857)	$	1,186,585
Net income	—		—		28,507		—		—		—		28,507
Other comprehensive income (loss), net of tax	—		—		—		(103)		—		—		(103)
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at September 25, 2021	33,047,807	$	9,949	$	1,344,956	$	2,603		6,149,364	$	(150,857)	$	1,206,651


						Accumulated
(amounts in thousands, except shares)						Other					Total
For the Thirty-Nine Weeks Ended	Common Stock			Retained		Comprehensive		Treasury Stock			Shareholders’
September 24, 2022 and September 25, 2021	Shares	Amount		Earnings		Income (Loss)		Shares	Amount		Equity
Balance at December 25, 2021	33,047,807	$	9,949	$	1,358,963	$	1,687	6,149,364	$	(150,857)	$	1,219,742
Net Income	—		—		96,313		—	—		—		96,313
Other comprehensive income (loss), net of tax	—		—		—		(9,143)	—		—		(9,143)
Dividends paid	—		—		(25,823)		—	—		—		(25,823)
Balance at September 24, 2022	33,047,807	$	9,949	$	1,429,453	$	(7,456)	6,149,364	$	(150,857)	$	1,281,089

Balance at December 26, 2020	33,047,807	$	9,949	$	1,283,737	$	3,286	6,149,364	$	(150,857)	$	1,146,115
Net income	—		—		86,234		—	—		—		86,234
Other comprehensive income (loss), net of tax	—		—		—		(683)	—		—		(683)
Dividends paid	—		—		(25,016)		—	—		—		(25,016)
Balance at September 25, 2021	33,047,807	$	9,949	$	1,344,956	$	2,603	6,149,364	$	(150,857)	$	1,206,651

See accompanying notes to Consolidated Financial Statements. ~~Cash~~

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	39 Weeks Ended
(amounts in thousands)		September 24, 2022		September 25, 2021
Cash flows from operating activities:
Net income	$	96,313	$	86,234
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		77,604		77,232
(Gain) loss on disposition of fixed assets		(2,481)		524
Unrealized (gain) loss in value of equity securities		1,590		463
Deferred income taxes		(1,711)		7,812
Unrealized (gain) loss in SERP		6,082		(2,130)
Changes in operating assets and liabilities:
Inventories		(30,499)		11,161
Accounts receivable and prepaid expenses		(3,689)		11,289
Accounts payable and other liabilities		(9,802)		(20,868)
Income taxes		9,248		10,164
Other		(344)		224
Net cash provided by operating activities		142,311		182,105
Cash flows from investing activities:
Purchase of property and equipment		(83,335)		(118,156)
Proceeds from the sale of property and equipment		6,710		5,856
Purchase of marketable securities		(267,106)		(19,455)
Proceeds from the sale and maturities of marketable securities		287,124		12,275
Purchase of intangible assets		(944)		(165)
Proceeds from sale of intangible assets		125		—
Change in SERP investment		(507)		(1,488)
Net cash used in investing activities		(57,933)		(121,133)
Cash flows from financing activities:
Dividends paid		(25,823)		(25,016)
Net cash used in financing activities		(25,823)		(25,016)
Net increase (decrease) in cash and cash equivalents		58,555		35,956
Cash and cash equivalents at beginning of year		86,048		136,612
Cash and cash equivalents at end of period	$	144,603	$	172,568

See accompanying notes to Consolidated Financial Statements. In the first thirty-nine weeks of 2022, there was $21.7 millioncash paid for income taxes ~~was $12.8 million and $29.4~~compared to $13.5 million in 2021 for the ~~first 39 weeks of 2017 and 2016, respectively.~~same period. Cash paid for interest related to long-term debt was ~~$752~~$24 thousand and $24 thousand in the first 39thirty-nine weeks of ~~2017.~~ 2022 and 2021, respectively.

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) Significant Accounting Policies

Basis of Presentation: The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring deferrals and accruals) considered necessary for a fair presentation have been included. The operating results for the periods presented are not necessarily indicative of the results to be expected for the full year. The Company has evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements and there were no material subsequent events which require additional disclosure. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the ~~Company's~~Company’s latest Annual Report on Form 10-K.

(2) Current Relevant Accounting Standards

~~In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, as amended by several subsequent ASU’s, which establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In August 2015, the FASB issued a one-year deferral of the effective date of this new guidance resulting in it now being effective for the Company beginning in fiscal year 2018. The Company ~~is currently in the process of evaluating the impact of adoption of the ASU. The Company’s initial assessment of the new guidance has identified customer loyalty programs~~regularly monitors recently issued accounting standards and gift cards potentially affected by the new guidance. Any effects related to these transactions would be primarily changes in presentation within the Company’s Consolidated Statements of Income, but are not expected to affect the Company’s Consolidated Balance Sheets or the Consolidated Statements of Cash Flows. Any effect of net earnings as a result of the adoption currently is not expected to be material.assesses their applicability and impact. The Company ~~expects~~believes that ~~the adoption of the ASU~~there are no accounting standard updates that have or will ~~not~~ have a material or significant impact on the Company’s point of sale product sales. The Company expects to adopt the new standard using the modified retrospective method beginning December 31, 2017 and will further disclose the impact to the financial statements at that point.accounting policies.

~~In January 2016, the FASB issued ASU 2016-01~~ ~~Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~. ASU 2016-01 generally requires that equity investments (excluding equity method investments) be measured at fair value with changes in fair value recognized in net income. The Company expects that the adoption of ASU 2016-01 will likely have an impact on the net income reported in the Company’s Consolidated Statements of Income, but will not impact the Company’s comprehensive income or shareholders’ equity. The amendment is effective for fiscal years beginning after December 15, 2017, with the cumulative effect of the adoption made to the balance sheet as of the date of adoption. Adoption will result in a reclassification of the related accumulated unrealized appreciation, net of applicable deferred income taxes, currently included in accumulated other comprehensive income to retained earnings, resulting in no impact on the Company’s shareholders’ equity.

~~In February 2016, the FASB issued ASU 2016-02~~ ~~Leases~~ (Topic 842). ASU 2016-02 requires lessees to recognize assets and liabilities for the rights and obligations created by their leases with lease terms more than 12 months. ASU 2016-02 will become effective for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption of the ASU and expects the adoption to have a significant impact on the Company’s Consolidated Balance Sheets.

~~In March 2016, the FASB issued ASU 2016-04~~ ~~Liabilities – Extinguishments of Liabilities~~ ~~(Subtopic 405-20)~~ ~~Recognition of Breakage for Certain Prepaid Stored-Value Products~~. ASU 2016-04 requires that an entity must disclose the methodology and specific judgements made in applying the breakage recognized. ASU 2016-04 will become effective for the financial statements issued for the fiscal years beginning after December 15, 2017. Early application is permitted including adoption in an interim period. The Company expects that the adoption of the ASU will not have a significant impact on the Company’s Consolidated Financial Statements.

~~Table of Contents~~

~~WEIS MARKETS, INC.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

(3) Marketable Securities

The Company’s marketable securities are all classified as available-for-sale within “Current Assets” in the Company’s Consolidated Balance Sheets. FASB has established three levels of inputs that may be used to measure fair value:

Level 1Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and

Level 3Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company’s marketable securities valued using Level 1 inputs include highly liquid equity securities, for which quoted market prices are available. The Company’s ~~municipal~~ bond and commercial paper portfolio is ~~valued using Level 2 inputs. The Company’s municipal bonds are~~ valued using a combination of pricing for similar securities, recently executed transactions, cash flow models with yield curves and other pricing models utilizing observable inputs, which are considered Level 2 inputs.

For Level 2 investment valuation, the Company utilizes standard pricing procedures of its investment advisory firm which includes various ~~third party~~third-party pricing services. These procedures also require specific price monitoring practices as well as pricing review reports, valuation oversight and pricing challenge procedures to maintain the most accurate representation of investment fair market value.

The Company accrues interest on its bond and commercial paper portfolio throughout the life of each bond and commercial paper held. Dividends from the equity securities are recognized as received. ~~Both interest~~Interest, dividends and ~~dividends~~unrealized gains and losses on equity securities are recognized in “Investment income (loss) and interest expense” on the Company’s Consolidated Statements of Income. ~~Investment income was $831~~The Company recognized investment loss of $261 thousand ~~and $2.6 million~~ in the ~~third quarter and~~thirteen weeks ended September 24, 2022, which included an unrealized loss in equity securities of $1.4 million. In the ~~first 39~~thirteen weeks ended September 25, 2021, the Company recognized investment income of ~~2017, respectively. Investment~~$215 thousand, which included an unrealized loss in equity securities of $381thousand. In the thirty-nine weeks ended September 24, 2022, the Company recognized investment income ~~was $687 thousand and $2.0~~of $1.4 million, which included an unrealized loss in equity securities of $1.6 million. In the ~~third quarter and first 39~~thirty-nine weeks ended September 25, 2021, the Company recognized investment income of ~~2016, respectively.~~$1.4 million, which included unrealized losses in equity securities of $463 thousand.

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Marketable securities, as of September ~~30, 2017~~24, 2022 and December ~~31, 2016,~~25, 2021, consisted of:

Gross
Gross

(dollars in thousands)
Amortized
Unrealized
Unrealized
Fair
September 30, 2017
Cost
Holding Gains
Holding Losses
Value
Available-for-sale:

Level 1

Equity securities
$
1,198
$
7,487
$
-
$
8,685
Level 2

Municipal bonds

54,269

1,048

(81)

55,236

$
55,467
$
8,535
$
(81)
$
63,921


			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
September 24, 2022	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	4,920
Level 2
Corporate and municipal bonds	$	149,483	$	1,210	$	(11,426)		139,267
Commercial Paper		26,892		57		—		26,949
	$	176,375	$	1,267	$	(11,426)	$	171,136


			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
December 25, 2021	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	6,509
Level 2
Corporate and municipal bonds	$	151,947	$	4,753	$	(2,384)		154,315
Commercial Paper		44,931		2		(13)		44,920
	$	196,878	$	4,755	$	(2,397)	$	205,744

Gross
Gross

(dollars in thousands)
Amortized
Unrealized
Unrealized
Fair
December 31, 2016
Cost
Holding Gains
Holding Losses
Value
Available-for-sale:

Level 1

Equity securities
$
1,198
$
8,162
$
-
$
9,360
Level 2

Municipal bonds

57,739

531

(459)

57,811

$
58,937
$
8,693
$
(459)
$
67,171

Maturities of marketable securities classified as available-for-sale at September ~~30, 2017,~~24, 2022, were as follows:

Amortized

Fair
(dollars in thousands)

Cost

Value
Available-for-sale:

Due within one year
$
10,367
$
10,435
Due after one year through five years

22,789

23,212
Due after five years through ten years

21,113

21,589
Equity securities

1,198

8,685

$
55,467
$
63,921


	Amortized		Fair
(amounts in thousands)	Cost		Value
Available-for-sale:
Due within one year	$	59,607	$	58,578
Due after one year through five years		72,343		68,242
Due after five years through ten years		32,235		28,611
Due after ten years		12,190		10,785
	$	176,375	$	166,216

~~Table of Contents~~

~~WEIS MARKETS, INC.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~(3) Marketable Securities (continued)~~

SERP Investments

The Company also maintains a non-qualified supplemental executive retirement ~~plan and a non-qualified pharmacist deferred compensation~~ plan for certain of its associates which allows them to defer income to future periods. Participants in the plans earn a return on their deferrals based on mutual fund investments. The Company chooses to invest in the underlying mutual fund investments to offset the liability associated with the non-qualified deferred compensation plans. Such investments are reported on the Company’s Consolidated Balance Sheets as “SERP investment,” are classified as trading securities and are measured at fair value using Level 1 inputs with gains and losses included in “Investment income (loss) and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment loss of $1.2 million in the thirteen weeks ended September 24, 2022, and investment income of $401 thousand in the same period in 2021. The Company recognized investment loss of $4.8 million and investment income of $3.0 million in the thirty-nine weeks ended September 24, 2022, and September 25, 2021, respectively. The changes in the underlying liability to the associates are recorded in ~~“Operating, general and administrative expenses.~~“Other income (expense).”

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(4) Accumulated Other Comprehensive Income

All balances in accumulated other comprehensive income are related to available-for-sale marketable securities. The following table sets forth the balance of the Company’s accumulated other comprehensive income, net of tax.



		~~Unrealized Gains~~
		~~on Available-for-Sale~~
~~(dollars in thousands)~~		~~Marketable Securities~~
~~Accumulated other comprehensive income balance as of December 31, 2016~~	$	~~4,852~~

~~Other comprehensive income before reclassifications~~		~~147~~
~~Amounts reclassified from accumulated other comprehensive income~~		3
~~Net current period other comprehensive income~~		~~150~~
~~Accumulated other comprehensive income balance as of September 30, 2017~~	$	~~5,002~~


	Unrealized Gains (Losses)
	on Available-for-Sale
(amounts in thousands)	Marketable Securities
Accumulated other comprehensive income balance as of December 25, 2021	$	1,687

Other comprehensive income (loss)		(9,143)
Net current period other comprehensive income (loss)		(9,143)
Accumulated other comprehensive income balance as of September 24, 2022	$	(7,456)

~~The following table sets forth the effects on net income of the amounts reclassified out of accumulated other comprehensive income for the periods ended September 30, 2017 and September 24, 2016.~~

Amounts Reclassified from

Accumulated Other Comprehensive Income to the

Consolidated Statements of Income

13 Weeks Ended
39 Weeks Ended
(dollars in thousands)
Location
September 30, 2017
September 24, 2016
September 30, 2017
September 24, 2016
Unrealized gains (losses) on available-for-sale marketable securities

Investment income and interest expense
$
(5)
$
169
$
(5)
$
438

Provision for income taxes

2

(70)

2

(181)
Total amount reclassified, net of tax

$
(3)
$
99
$
(3)
$
257

(5) ~~Acquisitions~~

On August 1, 2016, the Company purchased five Mars Super Market stores located in Maryland. Weis Markets, Inc. acquired these locations and their operations in an effort to expand its presence in the Baltimore County region. The results of operations of the former Mars Super Market acquisition are included in the accompanying Consolidated Financial Statements from the date of acquisition. The five former Mars Super Market stores contributed $22.2 million and $68.0 million to sales in the third quarter and the first 39 weeks of 2017, respectively. In the third quarter of 2016, the five former Mars Super Market stores contributed $13.0 million to sales. The cash purchase price paid was $24.6 million for the property, equipment, inventories, prepaid expenses and goodwill related to this purchase. The Company accounted for this transaction as a business combination in accordance with the acquisition method. The fair value of intangibles was determined based on the discounted cash flow model and property and equipment were determined based on external appraisals. Weis Markets, Inc. assumed two lease obligations in the acquisition of the former Mars Super Market stores and entered into two new lease agreements. Goodwill of $13.3 million has been recorded, based upon the expected benefits to be derived from new management business strategy and cost synergies. The goodwill is deductible for tax purposes.

~~Table of Contents~~

~~WEIS MARKETS, INC.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~(5) Acquisitions (continued)~~

In September 2016, the Company began its acquisition of 38 former Food Lion, LLC stores. Within eight weeks, ending in October 2016, Weis Markets acquired 21 Maryland, 13 Virginia and 4 Delaware former Food Lion, LLC stores. The results of operations of the 38 former Food Lion, LLC stores are included in the accompanying Consolidated Financial Statements from the date of acquisition. The Company accounted for this transaction as a business combination in accordance with the acquisition method. The fair value of intangibles was determined based on the discounted cash flow model and property and equipment were determined based on external appraisals. The acquired locations were part of a FTC forced divestiture in the approval process of the merger of Ahold and Delhaize Group, which resulted in a below fair value purchase price consideration. The cash purchase price paid was $29.4 million for the property, equipment, inventories, prepaid expenses and liabilities. Weis Markets, Inc. assumed thirty lease obligations and ownership of eight locations. The Company recognized a gain of $23.9 million on the purchase of the 38 former Food Lion, LLC stores. The 38 former Food Lion, LLC stores contributed $91.1 million and $2~~80.0~~ million to sales in the third quarter and the first 39 weeks of 2017, respectively. In the third quarter of 2016, the 10 former Food Lion, LLC stores that were transitioned to Weis stores contributed $2.0 million to sales.

On October 30, 2016, Weis Markets acquired a former Nell’s Family Market store located in East Berlin, Pa from C&S Wholesale Grocers. The results of operations of the former Nell’s Family Market acquisition are included in the accompanying Consolidated Financial Statements from the date of acquisition. The purchase price was $13.0 million, of which $3.4 million is payable over a 4 year term for the property, equipment, inventory, prepaid expenses and liabilities. The Company accounted for this transaction as a business combination in accordance with the acquisition method. The fair value of intangibles was determined based on the discounted cash flow model and property and equipment were determined based on external appraisals. The former Nell’s Family Market contributed $4.4 million and $13.1 million to sales in the third quarter and the first 39 weeks of 2017, respectively. Goodwill of $3.9 million has been recorded, based upon the expected benefits to be derived from new management business strategy and cost synergies. The goodwill is deductible for tax purposes.

The pro forma information includes historical results of operations of the 38 former Food Lion Supermarket and 5 former Mars Super Market stores but does not include efficiencies, cost reductions, synergies or investments in lower prices for the Company’s customers expected to result from the acquisitions. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the 38 former Food Lion Supermarket and the 5 former Mars Super Market stores been acquired at the beginning of 2016. Pro forma results of sales, assuming the acquisitions had taken place at the beginning of 2016, are included in the following table. The Company does not have reliable information to provide additional pro forma disclosures.

13 Weeks Ended

39 Weeks Ended

Pro Forma

Pro Forma
(dollars in thousands)

September 30, 2017

September 24, 2016

September 30, 2017

September 24, 2016
Sales

$
854,261

$
867,149

$
2,583,059

$
2,616,117

~~(6)~~ Long-Term Debt

On September 1, 2016, Weis Markets entered into a revolving credit agreement with Wells Fargo Bank, National Association (the ~~Credit Agreement).~~“Credit Agreement”), which was amended on September 29, 2021, and matures on September 1, 2024. The Credit Agreement provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed ~~$100.0~~$30.0 million with an additional discretionary amount available of ~~$50.0~~$70.0 million. As of September ~~30, 2017, $52.1~~24, 2022, the availability under the revolving credit agreement was $25.5 million, net of ~~the available $100.0~~$4.5 million was borrowed from the credit facility. The loan will bear interest on the outstanding principal amount at the one month LIBOR rate plus the applicable margin rate of 0.65% until its maturity on September 1, 2019. The loan was used to fund the 2016 acquisitions and the Company’s working capital requirements. The only financial covenant in the credit facility requires the Company’s trailing twelve month EBITDA to be at least $75.0 million. The Credit Agreement is also being utilized by the Company for $15.3 million of outstanding letters of ~~credit as of September 30, 2017.~~credit. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company. ~~The Company does not anticipate drawing on any of them.~~

Interest expense related to long-term debt was ~~$174 thousand and $707~~$8 thousand in each of the ~~third quarter~~thirteen weeks ended September 24, 2022, and September 25, 2021. In each of the first 39thirty-nine weeks of ~~2017, respectively.~~ 2022 and 2021, interest expense related to long-term debt totaled $24 thousand.

(6) Revenue Recognition

The Chief Operating Officer, the Company’s chief operating decision maker, analyzes store operational revenues by geographical area but each area offers customers similar products, has similar distribution methods, and is supported by centralized management processes. The Company’s operations are reported as a single reportable segment.

The following table represents net sales by type of product for the thirteen and thirty-nine weeks ended September 24, 2022, and September 25, 2021:


	13 Weeks Ended
(amounts in thousands)	September 24, 2022				September 25, 2021
Grocery	$	973,707	84.6	%	$	912,984	85.9	%
Pharmacy		107,366	9.3			99,210	9.3
Fuel		66,350	5.8			49,262	4.6
Manufacturing		3,128	0.3			1,996	0.2
Total net sales	$	1,150,551	100.0	%	$	1,063,452	100.0	%



	39 Weeks Ended
(amounts in thousands)	September 24, 2022				September 25, 2021
Grocery	$	2,867,699	84.5	%	$	2,687,066	86.2	%
Pharmacy		317,564	9.4			296,278	9.5
Fuel		195,521	5.8			127,460	4.1
Manufacturing		9,069	0.3			6,337	0.2
Total net sales	$	3,389,853	100.0	%	$	3,117,141	100.0	%

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(7) Leases

As of September 24, 2022, the Company leased approximately 49% of its open store facilities under operating leases that expire at various dates through 2036, with the remaining store facilities being owned. These leases generally provide for fixed annual rentals; however, several provide for minimum annual rentals plus variable lease costs related to real estate taxes and insurance as well as contingent rentals based on a percentage of annual sales or increases periodically based on inflation. These variable lease costs are not included in the measurement of the operating lease right-to-use assets or lease liabilities and are charged to the related expense category included in “Operating, general and administrative expenses.” Most of the leases contain multiple renewal options, under which the Company may extend the lease terms from 5 to 20 years. Additionally, the Company has operating leases for certain transportation and other equipment.

The Company leases or subleases space to tenants in owned, vacated and open store facilities. Rental income is recorded when earned as a component of “Operating, general and administrative expenses.”

The following is a schedule of the lease costs included in “Operating, general and administrative expenses” for the thirteen and thirty-nine weeks ended September 24, 2022, and September 25, 2021.


	13 Weeks Ended				39 Weeks Ended
(amounts in thousands)		September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Operating lease cost	$	11,978	$	11,511	$	35,633	$	34,029
Variable lease cost		2,578		2,812		8,165		8,060
Lease or sublease income		(2,421)		(2,530)		(7,259)		(7,453)
Net lease cost	$	12,135	$	11,793	$	36,539	$	34,636

(8) Taxes

The Company reduced its provision for income taxes by $5.6 million for the period ended September 24, 2022 primarily due to the effects of Pennsylvania House Bill 1342 which was enacted on July 8, 2022. The bill made significant changes to the Commonwealth’s corporate income tax laws which included lowering the tax rate gradually from 9.99% in 2022 to 4.99% in 2031, updating market sourcing rules, and codifying the economic nexus standard.

The Company’s effective income tax rate was 14.2% and 27.2% for the thirteen weeks ended September 24, 2022 and September 25, 2021, respectively. The Company’s effective income tax rate was 22.9% and 26.7% for the thirty-nine weeks ended September 24, 2022 and September 25, 2021, respectively. The effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes, net of permanent differences.

Table of Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of Weis Markets, Inc.’s (the “Company”) financial condition and results of operations should be read in conjunction with the unaudited Consolidated Financial Statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q, the Company’s audited Consolidated Financial Statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December ~~31, 2016,~~25, 2021, filed with the U.S. Securities and Exchange Commission, as well as the cautionary statement captioned "Forward-Looking Statements" immediately following this analysis.

Company Summary

Weis Markets is a conventional supermarket chain that operates ~~204~~197 retail stores with over ~~23,000~~23 thousand associates located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. Its products ~~sold~~ include groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. The store product selection includes national, local and private ~~brands~~brands.

The Company advertises its products and ~~the~~promotes its brand through digital and printed circulars; radio ads; e-mail blasts; and on-line via its web site, social media and mobile applications. The Company promotes by using Everyday Lower Price; Low Price Guarantee; Low, ~~Price Guarantee~~Low Price; 3 Day Sale; senior and military discounts; and Loyalty programs. The Loyalty program includes ~~fuel rewards~~reward points that may be redeemed for discounts on items in store, at the Company’s fuel stations or one of its ~~third party~~third-party fuel station partners.

Utilizing its own ~~centrally~~strategically located distribution center and transportation fleet, Weis Markets self distributes approximately ~~67%~~63% of product with the remaining being supplied by direct store delivery vendors. In addition, the Company has three manufacturing facilities which process milk, ice cream and fresh meat products. The corporate offices are located in Sunbury, PaPA where the Company was founded in 1912.

On March 11, 2020, the World Health Organization declared that the novel coronavirus (COVID-19) had become a pandemic, and on March 13, the U.S. President declared a National Emergency concerning the disease. This resulted in government mandated shutdowns, as well as multiple legislative acts to provide emergency economic assistance for individuals, families and businesses affected by the novel coronavirus pandemic. These events were accretive to our sales and gross profits compared to the time periods preceding the impact of the novel coronavirus pandemic. The ~~Company's operations are reported as a single reportable segment.~~Company is not able to speculate how the ensuing economy or unknown future related expenses will affect it after the governmental novel coronavirus pandemic measures have ended.

~~In 2016, Weis Markets acquired five Mars Super Market locations in Baltimore County, Md, 38 Food Lion stores throughout Maryland, Virginia and Delaware, and a Nell's Family Market in East Berlin, Pa.~~ The completion of these individual acquisitions expanded the Company's footprint into Virginia and Delaware, and increased its store count by 25 percent. Beginning August 1, 2016, the Company converted the 44 stores to Weis Markets stores in 96 days ending in November, during which it interviewed and hired more than 2,000 team members who were previously employed at the acquired locations. In 2017, the acquired store group is providing a positive cash flow for the Company as management continues to develop the stores using its business model. Although there are no pending acquisitions, the Company continues to ~~investigate acquisition opportunities~~innovate and remain relevant to industry trends and offering customer convenience by presenting programs like “Weis 2 Go Online” ordering with curbside pickup and home delivery. As of September 24, 2022, the Company offered Weis 2 Go Online curbside pickup in 188 of its locations as well as ~~grow its existing store base organically.~~

~~On March 9, 2017,~~home delivery with Shipt in 176 locations. In September 2021, the Company ~~opened its new 65,000 square-foot prototype store next~~announced a partnership with DoorDash to offer on-demand grocery delivery, which is currently available in 189 locations. Total Ecommerce sales were $51.3 million in the first thirty-nine weeks of 2022 compared to $57.2 million in the same period in 2021, a ~~major competitor in Enola, Pa. Designated~~decrease of 10.3 percent. When compared to the “Community Market” format, the store features a brand new store layout and unique features to elevate the shopping experience including a pub, grill and ice cream parlor, featuring the Company’s own ice cream. The store contains a Pennsylvania foods section and more than 1,900 organic and gluten-free products, along with a mix-and-match pick K-cup 12-packs section and a Chobani Yogurt Bar. The Company plans to review the successfirst thirty-nine weeks of ~~the new features and utilize them where appropriate in other stores.~~2020 total Ecommerce sales have increased 3.3 percent.

Table of Contents

WEIS MARKETS, INC.

ITEM 2. ~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
~~(continued)~~

~~Results of Operations~~

Analysis of Consolidated Statements of Income

Percentage Changes

13 Weeks Ended
39 Weeks Ended
2017 vs. 2016
2017 vs. 2016
(dollars in thousands except per share amounts)
September 30, 2017
September 24, 2016
September 30, 2017
September 24, 2016
13 Weeks Ended
39 Weeks Ended
Net sales
$
854,261

$
742,986

$
2,583,059

$
2,211,622

15.0
%

16.8
%
Cost of sales, including warehousing and distribution expenses

631,422

538,122

1,890,545

1,597,709

17.3

18.3

Gross profit on sales

222,839

204,864

692,514

613,913

8.8

12.8

Gross profit margin

26.1
%

27.6
%

26.8
%

27.8
%

Operating, general and administrative expenses

216,645

188,901

638,352

542,624

14.7

17.6

  O, G & A, percent of net sales

25.4
%

25.4
%

24.7
%

24.5
%

  Income from operations

6,194

15,963

54,162

71,289

(61.2)

(24.0)

  Operating margin

0.7
%

2.1
%

2.1
%

3.2
%

Investment income and interest expense

657

666

1,893

1,985

(1.4)

(4.6)

Investment income and interest expense, percent of net sales

0.1
%

0.1
%

0.1
%

0.1
%

Income before provision for income taxes

6,851

16,629

56,055

73,274

(58.8)

(23.5)

Income before provision for income taxes, percent of net sales

0.8
%

2.2
%

2.2
%

3.3
%

Provision for income taxes

2,402

6,001

21,295

27,253

(60.0)

(21.9)

Effective income tax rate

35.1
%

36.1
%

38.0
%

37.2
%

Net income
$
4,449

$
10,628

$
34,760

$
46,021

(58.1)
%

(24.5)
%
Net income, percent of net sales

0.5
%

1.4
%

1.3
%

2.1
%

Basic and diluted earnings per share
$
0.16

$
0.40

$
1.29

$
1.71

(60.0)
%

(24.6)
%

~~Table of Contents~~

~~WEIS MARKETS, INC.~~
~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~
~~(continued)~~

~~Results of Operations~~ (continued)

Two-Year StackedComparable Store Sales Analysis

~~Net~~Management is providing Comparable Store Sales Two-Year Stacked analysis, a non-GAAP measure, because management believes this metric is useful to investors and analysts. A Comparable Store Sales Two-Year Stacked analysis presents a comparison of results and trends over a longer period of time to demonstrate the effect of the novel coronavirus pandemic on the operating results of the Company. Information presented in the tables below is not intended for use as an alternative to any other measure of performance. It is not recommended that this table be considered a substitute for the Company’s operating results as reported in accordance with GAAP.

~~Analysis~~Year-over-year and sequential comparisons are the primary calculations used to analyze operating results, however, due to significant fluctuations caused by the novel coronavirus pandemic management believes it is necessary to provide a Two-Year Stacked Comparable Store Sales analysis. The following tables provide the two-year stacked comparable store sales, including and excluding fuel, for the periods ended September 24, 2022, and September 25, 2021, as well as periods ended September 25, 2021, and September 26, 2020, respectively. Comparable store sales increased 7.9 percent on an individual year-over-year basis and increased 12.5 percent on a two-year stacked basis for the thirteen weeks ended September 24, 2022 following the increase of ~~Sales~~14.8 percent for the same period in 2020. Comparable store sales increased 8.6 percent on an individual year-over-year basis and increased 8.5 percent on a two-year stacked basis in the thirty-nine weeks ended September 24, 2022 following the increase of 17.3 percent for the same period in 2020.


	Percentage Change
	13 Weeks Ended
		2022 vs. 2021		2021 vs. 2020
Comparable store sales (individual year)		7.9	%	4.6	%
Comparable store sales (two-year stacked)		12.5
Comparable store sales, excluding fuel (individual year)		6.7		3.2	%
Comparable store sales, excluding fuel (two-year stacked)		9.9	%

	Percentage Change
	39 Weeks Ended
		2022 vs. 2021		2021 vs. 2020
Comparable store sales (individual year)		8.6	%	(0.1)	%
Comparable store sales (two-year stacked)		8.5
Comparable store sales, excluding fuel (individual year)		6.8		(1.4)	%
Comparable store sales, excluding fuel (two-year stacked)		5.4	%

Percentage Changes

2017 vs. 2016
September 30, 2017
13 Weeks Ended
39 Weeks Ended
Net sales

15.0
%

16.8
%
Net sales, excluding fuel sales

15.1

16.8

Comparable store sales

1.5

1.6

Comparable store sales, excluding fuel sales

1.1

1.2

Comparable store sales, adjusted for holiday impact

N/A

1.8

Comparable store sales, adjusted for holiday impact, excluding fuel sales

N/A
%

1.3
%

When calculating the percentage change in comparable store sales, the Company defines a new store to be comparable ~~when~~after it has been in operation for five full fiscal quarters. Relocated stores and stores with expanded square footage are included in comparable store sales since these units are located in existing markets and are open during construction. Planned store dispositions are excluded from the calculation. The Company only includes retail food stores in the calculation.

Table of Contents

~~Due~~WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Results of Operations

Analysis of Consolidated Statements of Income


													Percentage Change
	13 Weeks Ended						39 Weeks Ended						13 Weeks Ended		39 Weeks Ended
(amounts in thousands, except per share amounts)		September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021		2022 vs. 2021		2022 vs. 2021
Net sales	$	1,150,551		$	1,063,452		$	3,389,853		$	3,117,141		8.2	%	8.7	%
Cost of sales, including advertising, warehousing and distribution expenses		862,908			780,320			2,516,311			2,285,428		10.6		10.1
Gross profit on sales		287,643			283,132			873,542			831,713		1.6		5.0
Gross profit margin		25.0	%		26.6	%		25.8	%		26.7	%
Operating, general and administrative expenses		253,985			244,164			750,066			715,353		4.0		4.9
O, G & A, percent of net sales		22.1	%		23.0	%		22.1	%		22.9	%
Income from operations		33,658			38,968			123,476			116,360		(13.6)		6.1
Operating margin		2.9	%		3.7	%		3.6	%		3.7	%
Investment income (loss) and interest expense		(1,483)			608			(3,394)			4,360		(343.9)		(177.8)
Investment income (loss) and interest expense, percent of net sales		(0.1)	%		0.1	%		(0.1)	%		0.1	%
Other income (expense)		1,214			(401)			4,805			(3,007)		402.7		259.8
Other income (expense), percent of net sales		0.1	%		(0.0)	%		0.1	%		(0.1)	%
Income before provision for income taxes		33,389			39,175			124,887			117,713		(14.8)		6.1
Income before provision for income taxes, percent of net sales		2.9	%		3.7	%		3.7	%		3.8	%
Provision for income taxes		4,731			10,668			28,574			31,479		(55.7)		(9.2)
Effective income tax rate		14.2	%		27.2	%		22.9	%		26.7	%
Net income	$	28,658		$	28,507		$	96,313		$	86,234		0.5	%	11.7	%
Net income, percent of net sales		2.5	%		2.7	%		2.8	%		2.8	%
Basic and diluted earnings per share	$	1.07		$	1.06		$	3.58		$	3.21		0.9	%	11.5	%

Net Sales

Individual Year-Over-Year Analysis of Sales


	Percentage Change
	2022 vs. 2021
September 24, 2022	13 Weeks Ended		39 Weeks Ended
Net sales	8.2	%		8.7	%
Net sales, excluding fuel	6.9			6.8
Comparable store sales	7.9			8.6
Comparable store sales, excluding fuel	6.7	%		6.8	%

When calculating the percentage change in comparable store sales, the Company defines a new store to be comparable after it has been in operation for five full fiscal quarters. Relocated stores and stores with expanded square footage are included in comparable store sales since these units are located in existing markets and are open during construction. Planned store dispositions are excluded from the ~~Company’s 2016 fiscal year being comprised~~calculation. The Company only includes retail food stores in the calculation.

Table of 53 weeks, the first quarter of 2017 did not include a New Year holiday sales week. Management estimates the incremental holiday sales impact was approximately $3 million during the first 39 weeks of the year.Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

According to the latest U.S. Bureau of Labor Statistics’ report, the ~~annual~~ Seasonally Adjusted Food-at-Home Consumer Price Index ~~decreased 0.9% compared to a decrease of 0.7%~~increased 2.8% and 2.3% for the ~~same period last year.~~thirteen week periods ended September 24, 2022 and September 25, 2021, respectively. The Seasonally Adjusted Food-at-Home Consumer Price Index increased 10.6% and 4.2% for thirty-nine week periods ended September 24, 2022 and September 25, 2021, respectively. Even though the U.S. Bureau of Labor Statistics’ index rates may be reflective of a trend, it will not necessarily be indicative of the Company’s actual results. According to the U.S. Department of Energy, the ~~13 week~~ average price of gasoline in the Central Atlantic States increased ~~11.3%~~32.7% or ~~$0.27~~$1.08 per gallon in the ~~third quarter of 2017 compared to the same quarter in 2016. The average price of gasoline for the Central Atlantic States increased 13.4% or $0.31 per gallon during the first 39~~thirteen weeks ~~of 2017~~ended September 24, 2022, compared to the same period in ~~2016.~~

~~While the Company’s center store products, such as grocery and dairy were slightly inflationary~~2021. The average price of gasoline in the ~~third quarter, deflation from meat and produce offset any gains. Pharmacy sales volume~~Central Atlantic States increased as a result of the Affordable Care Act and increased immunizations. Fuel sales benefited from inflation as comparable fuel sales rose 11.9% and 13.9% during the third quarter and the first 39 weeks of 2017, respectively. In addition, the impact of winter weather events40.6% or $1.24 per gallon in the first 39thirty-nine weeks of ~~2017~~2022 when compared to the same period in 2021.

Total net sales increased 8.2% to $1.2 billion for the thirteen weeks ended September 24, 2022, from $1.1 billion for the thirteen weeks ended September 25, 2021. In the thirty-nine weeks ended September 24, 2022, total net sales increased 8.7% to $3.4 billion from $3.1 billion. The increase in total net sales includes retail price inflation in grocery, fuel and ~~2016, negatively affected~~fresh product categories. Comparable store sales for the thirteen weeks ended September 24, 2022, compared to the same period in 2021 increased 7.9% including fuel and 6.7% excluding fuel. Comparable store sales ~~comparison by an estimated $7 million on a comparable store basis.~~for the thirty-nine weeks ended September 24, 2022, compared to the same period in 2021 increased 8.6% including fuel and 6.8% excluding fuel.

Although the Company experienced retail inflation and deflation in various commodities for the ~~quarters~~periods presented, ~~management~~the Company anticipates overall product costs to increase given the recent inflationary indicators in the food retail industry. Management cannot accurately measure the full impact of inflation or deflation on retail pricing due to changes in the types of merchandise sold between periods, shifts in customer buying patterns and the fluctuation of competitive factors. Management remains confident in its ability to generate long-term sales growth in a highly competitive environment, but also understands some competitors have greater financial resources and could use these resources to take measures which could adversely affect the ~~Company's~~Company’s competitive position.

Cost of Sales and Gross Profit

Cost of sales consists of direct product costs (net of discounts and allowances), net advertising costs, distribution center and transportation costs, as well as manufacturing facility operations. Almost all of the increase in cost of sales in 2017 as compared to 2016 is due to the increased sales volume in 2017. Both direct product cost and distribution cost increase when sales volume increases.

~~Table of Contents~~

~~WEIS MARKETS, INC.~~
~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~
~~(continued)~~

~~Results of Operations (continued)~~

~~Cost of Sales and Gross Profit (continued)~~

Gross profit ~~margin in~~on sales increased 1.6% and 5.0% for the ~~first 39~~thirteen and thirty-nine weeks ~~of 2017 decreased 1.0%~~ended September 24, 2022, compared to the same period in ~~2016 due to gross~~2021. Gross profit margin ~~declines of 1.1%~~decreased 1.6% and ~~1.5% in~~0.9% for the ~~first~~thirteen and third quarters of 2017, respectively. In the first quarter of 2017, the gross profit margin decline was attributable to lower than average winter sales volume due to lack of winter weather events. Decreased sales volume negatively impacts the gross profit margin by increasing inventory shrinkage and fixed distribution costs comparative rate. The majority of the decline in gross profit margin in the third quarter of 2017 asthirty-nine weeks ended September 24, 2022, compared to the same period in ~~the prior year was attributable to decreased profits~~2021. The Company experienced degradation in its gross profit margin as product costs increased in the ~~Company’s~~ fresh ~~departments. Deflation, competitive pricing~~meats and ~~inventory management challenges~~pharmacy departments and lower margin departments, such as fuel, increased in ~~some of~~ the ~~recently acquired stores significantly reduced profits as a percent of sales for produce, deli/food service, bakery, seafood and floral.~~

product mix.

Non-cash LIFO inventory valuation adjustments ~~changed from~~represent expense of ~~$0.8~~$11.8 million in the first 39thirty-nine weeks of ~~2016,~~2022 compared to ~~income~~expense of ~~$0.6~~$2.0 million in the same period ~~of 2017, accounting for 0.1% of the gross profit increase.~~

in 2021. Although the Company experienced ~~product~~ cost inflation and deflation in various commodities for the ~~quarters~~periods presented, ~~management cannot accurately measure~~ the ~~full impact of inflation or deflation on~~Company anticipates overall product costs ~~due~~ to ~~changes~~increase given the recent inflationary indicators in the ~~types~~food retail industry.

Table of ~~merchandise sold between periods, shifts in customer buying patterns and the fluctuation of competitive factors.~~Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Operating, General and Administrative Expenses

The majority of the ~~increase in~~ operating, general and administrative expenses ~~was~~are driven by ~~increased~~ sales volume.

~~Employee-related costs~~Employee expenses such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately ~~60%~~61.0% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor decreased ~~0.2% and 0.1%~~0.3% in the ~~third quarter~~thirteen and ~~the first 39~~thirty-nine weeks ~~of 2017, respectively,~~ended September 24, 2022 when compared to the same ~~periods~~period in ~~2016. The Company continues to monitor store labor efficiencies and develop labor standards to reduce cost while maintaining the Company’s customer service expectations.~~2021, respectively.

The Company’s self-insured health care benefit expenses increased $883 thousand or 14.0% and $194 thousand or 1.1% in the third quarter and the first 39 weeks of 2017, respectively, compared to the same periods last year. The variance is mainly attributed to an increase in the number of claims. However, the Company remains concerned about the impact that The Patient Protection and Affordable Care Act (ACA) will have on its future operating expenses.

Depreciation and amortization expense charged to “Operating, general and administrative expenses” was ~~$21.4~~$23.7 million, or ~~2.5%~~2.1% of net sales during the ~~third quarter of 2017~~thirteen weeks ended September 24, 2022 compared to ~~$19.2~~$23.6 million, or ~~2.6%~~2.2% of net sales during the ~~third quarter of 2016. Depreciation and amortization expense was $63.5 million, or 2.5% of net sales during~~thirteen weeks ended September 25, 2021. During the first 39thirty-nine weeks of ~~2017 compared to $56.2 million or 2.5% of net sales during the first 39 weeks of 2016. The increase in~~2022 and 2021, depreciation and amortization expense charged to “Operating, general and administrative expenses” was ~~the result~~$70.6 million, or 2.1% of ~~additional capital expenditures as the Company implements its capital expansion program~~net sales and ~~the 2016 acquisitions.~~$70.6 million, or 2.3% of net sales, respectively. See the Liquidity and Capital Resources section for further information regarding the Company’s capital ~~expansion~~expenditure program.


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

	13 Weeks Ended
(amounts in thousands)	Increase		Increase (Decrease)
September 24, 2022	(Decrease)		as a % of sales
Employee expenses	$	6,410	(0.5)	%
Fixed expense (amortization, depreciation, insurance expenses, and occupancy costs)		(2,060)	(0.5)
Utilities expense		3,178	0.2
Other expenses (financial service fees, technology, repairs and maintenance, supplies)		2,294	(0.1)


	39 Weeks Ended
(amounts in thousands)	Increase		Increase (Decrease)
September 24, 2022	(Decrease)		as a % of sales
Employee expenses	$	17,532	(0.6)	%
Fixed expense (amortization, depreciation, insurance expenses, and occupancy costs)		603	(0.3)
Utilities expense		9,354	0.2
Other expenses (financial service fees, technology, repairs and maintenance, supplies)		7,224	(0.1)

~~Table~~Overall, the operating, general and administrative expenses as a percent of ~~Contents~~

~~WEIS MARKETS, INC.~~
~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~
~~(continued)~~

~~Results~~sales presented for the thirteen and thirty-nine weeks ended September 24, 2022 have benefited in comparison with the 2021 percent of ~~Operations (continued)~~

~~Operating, General~~sales due to the increase in sales. Although employee and ~~Administrative Expenses (continued)~~

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 30, 2017
(Decrease)
as a % of sales
Employee-related expenses
$
17,315 0.1
%
Depreciation and amortization

1,934 (0.1)

Advertising

588 (0.1)

Financial transaction fees

1,994 0.1

Rent expense

2,290 0.1

Third-party services and repairs
$
3,475 0.1
%

39 Weeks Ended
(dollars in thousands)
Increase
Increase (Decrease)
September 30, 2017
(Decrease)
as a % of sales
Employee-related expenses
$
50,756 (0.2)
%
Depreciation and amortization

6,724 (0.1)

Advertising

4,381 0.1

Financial transaction fees

5,171 0.1

Rent expense

7,491 0.1

Third-party services and repairs
$
14,991 0.2
%

~~The dollar amount increases~~fixed expenses have increased from a cost perspective, the increase in ~~the above expense items are primarily driven by the acquisition of five former Mars Super Market stores, 38 former Food Lion stores and~~sales has caused a ~~former Nell’s Family Market store~~decrease in ~~the second half of 2016. The Company expects~~ the percent of sales ~~to decrease over time as it develops the acquisition stores’ sales and implements cost saving strategies.~~rate.

Provision for Income Taxes

~~Employee-related expenses increased~~The Company reduced its provision for income taxes by $5.6 million for the ~~reasons noted above,~~period ended September 24, 2022 primarily due to ~~increases in sales volume related~~the effects of Pennsylvania House Bill 1342 which was enacted on July 8, 2022. The bill made significant changes to the ~~2016 acquisitions~~Commonwealth’s corporate income tax laws which included lowering the tax rate gradually from 9.99% in 2022 to 4.99% in 2031, updating market sourcing rules, and an increased number of worker’s compensation claims. Hourly employees, particularly part time employees, are required to work increased hours when there is growth in sales volume. Increases in employee related expenses were offset by continued savings realized from a store labor efficiency project in 2015 and decreases in insurance claims costs. codifying the economic nexus standard.

~~Depreciation and amortization increased in 2017 for the reasons noted above and as a result of the~~The Company’s ~~store capital expenditure program and technology investments.~~

~~Advertising expense increased due to the 2016 acquisitions and as a result of strategic investments in broadcast advertising.~~

In addition to the increase in sales volume, the financial transaction fee increase can be attributed to an increase in credit card usage by customers of 3% and 2% in the third quarter and first 39 weeks of 2017, respectively, compared to the same periods in 2016.

~~Table of Contents~~

~~WEIS MARKETS, INC.~~
~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~
~~(continued)~~

~~Results of Operations (continued)~~

~~Provision for Income Taxes~~
~~The~~ effective income tax rate was ~~38.0%~~14.2% and ~~37.2% in~~27.2% for the ~~first 39~~thirteen weeks ~~of 2017~~ended September 24, 2022 and ~~2016,~~September 25, 2021, respectively. The ~~increase in the~~Company’s effective income tax rate ~~is due to a discrete item recorded in~~was 22.9% and 26.7% for the ~~first quarter of 2017. Historically, the~~thirty-nine weeks ended September 24, 2022 and September 25, 2021, respectively. The effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes, net of permanent differences.

Table of Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Liquidity and Capital Resources

The primary ~~sources~~source of cash ~~are~~is cash flows generated from ~~operations and borrowings under~~operations. In addition, the ~~2016~~Company has access to a revolving credit agreement ~~from~~entered into on September 1, 2016, and amended on September 29, 2021, with Wells Fargo Bank, ~~NA.~~NA (the “Credit Agreement”). The ~~Company’s~~Credit Agreement matures on September 1, 2024, and provides for an unsecured revolving credit ~~agreement has a~~facility with an aggregate principal amount ~~of $100.0~~not to exceed $30.0 million with an additional discretionary ~~availability~~amount available of ~~$50.0~~$70.0 million. As of September ~~30, 2017~~24, 2022, the ~~Company’s unused~~ availability under the revolving credit agreement was ~~$32.6~~$25.5 million with ~~$52.1 million of borrowings outstanding and $15.3~~$4.5 million of letters of credit outstanding. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company. ~~The Company does not anticipate drawing on any of them.~~

The Company’s investment portfolio consists of ~~marketable securities, which currently includes municipal~~high-grade bonds and commercial paper with maturity dates between one and 20 years and four high yield, large capitalized public company equity securities. AsThe portfolio totaled $171.1 million as of September ~~30, 2017, the portfolio totaled $63.9 million.~~24, 2022. Management anticipates maintaining the investment portfolio but has the ability to liquidate if needed.

The Company’s capital ~~expansion~~expenditure program includes the construction of new superstores, the expansion and remodeling of existing units, the acquisition of sites for future expansion, new technology purchases and the continued upgrade of the Company’s distribution facilities and transportation fleet. Management currently plans to invest approximately ~~$90.0~~$110 million in its capital ~~expansion~~expenditure program in ~~2017.~~

2022. The Company is experiencing limited availability of raw materials and equipment to complete remodels, supply chain and information technology upgrades, and smaller store improvement projects.

The Company expects that cash generated from operations and cash available under the ~~2016 revolving credit agreement~~Credit Agreement will fund its working capital requirements, debt requirements, capital ~~expansion~~expenditure program, acquisitions and dividends. The Company has no other commitment of capital resources as of September ~~30, 2017,~~24, 2022, other than the lease commitments on its store facilities and transportation equipment under operating leases that expire at various dates through ~~2033.~~

2036.

The Board of Directors’ 2004 resolution authorizing the repurchase of up to one million shares of the Company’s common stock has a remaining balance of 752,468 shares.

Quarterly Cash Dividends

At its regular meeting held in October, the Board of Directors ~~unanimously approved~~declared a quarterly dividend of ~~$0.30~~$0.34 per share, payable on November ~~20, 2017~~21, 2022, to shareholders of record on November ~~6, 2017.~~7, 2022. The Company expects to continue paying regular cash dividends on a quarterly basis. However, the Board of Directors reconsiders the declaration of dividends quarterly. The Company pays these dividends at the discretion of the Board of Directors and the continuation of these payments and the amount of the dividends depends upon the results of operations, the financial condition of the Company and other factors which the Board of Directors deems relevant.

Table of Contents

WEIS MARKETS, INC.

ITEM 2. ~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
~~(continued)~~

~~Liquidity and Capital Resources~~ (continued)

Cash Flow Information


	39 Weeks Ended
(amounts in thousands)		September 24, 2022		September 25, 2021		2022 vs. 2021
Net cash provided by (used in):
Operating activities	$	142,311	$	182,105	$	(39,794)
Investing activities		(57,933)		(121,133)		63,200
Financing activities		(25,823)		(25,016)		(807)

39 Weeks Ended

(dollars in thousands)
September 30, 2017
September 24, 2016
2017 vs. 2016
Net cash provided by (used in):

Operating activities
$
105,723

$
111,940

$
(6,217)

Investing activities

(63,623)

(132,918)

69,295

Financing activities

(36,599)

15,930

(52,529)

Operating

Cash flows from operating activities decreased $39.8 million in the first 39thirty-nine weeks of ~~2017 as~~2022 compared to the first 39thirty-nine weeks of ~~2016~~2021. The decrease in cash flow from operating activities is primarily ~~as a~~due to increased product costs in inventory, which is the result of ~~long-term incentive payments to associates of $11.8 million paid~~the recent inflationary pressures in the food retail industry in the first ~~quarter~~thirty-nine weeks of ~~2017.~~

2022 when compared to the same period in 2021.

Investing

~~Property and equipment purchases during~~In the first 39thirty-nine weeks of ~~2017 totaled $65.4 million~~2022, when compared to ~~$96.7 million~~the same period in ~~the first 39 weeks of 2016. In the third quarter of 2016 the Company invested $47.5 million towards~~2021, the purchase of ~~5 former Mars Super Market stores~~property and ~~ten former Food Lion, LLC stores. As~~equipment decreased $34.8 million and the proceeds from the sale and maturities of marketable securities exceeded the purchase of marketable securities by $27.2 million. Additionally, as a ~~percentage~~percent of sales, capital expenditures ~~including the acquisitions~~ were 2.5% ~~and 6.5%~~ in the first 39thirty-nine weeks of ~~2017~~2022 and ~~2016, respectively. In 2016,~~3.8% in the ~~Company sold $42.5 million~~first thirty-nine weeks of ~~marketable securities~~2021. The decrease as ~~it prepared~~a percent of sales in 2022 compared to ~~finance future acquisitions. In 2017,~~2021 is due to the ~~Company plans~~increase in sales as well as a decrease in spend resulting from limited availability of raw materials and equipment to ~~maintain its marketable securities~~complete remodels, supply chain and information technology upgrades, and smaller store improvement projects. For the remainder of 2022, management anticipates maintaining the investment portfolio ~~at its current level.~~

but has the ability to liquidate if needed.

Financing

The Company paid dividends of ~~$24.2~~$25.8 million and $25.0 million in the first 39thirty-nine weeks of ~~both 2017~~2022 and 2016. In 2017, payments on the revolving credit agreement increased net cash used in financing activities by $12.4 million. The Company anticipates payments on the revolving credit agreement to continue throughout the remainder2021, respectively.

Table of ~~2017. In 2016, the proceeds from the revolving credit agreement increased net cash provided by financing activities by $40.1 million.~~ Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Accounting Policies and Estimates

The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the Consolidated Financial Statements included in the ~~2016~~2021 Annual Report on Form 10-K. There have been no changes to the Significant Accounting Policies since the Company filed its Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016.~~

25, 2021.

Forward-Looking Statements

In addition to historical information, this Form 10-Q Report may contain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. For example, risks and uncertainties can arise with changes in: ~~general economic conditions, including their impact on capital expenditures; business conditions in~~competitive and reputational risks; financial, investment and infrastructure risks; information security, cybersecurity and data privacy risks; supply chain and third-party risks; risks created by pandemics (including the ~~retail industry;~~ongoing COVID-19 outbreak and the related responses of governments, consumers, customers, suppliers and employees); and legal, regulatory ~~environment; rapidly changing technology~~ and ~~competitive factors, including increased competition with regional and national retailers; and price pressures.~~other external risks. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect ~~management's~~management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files periodically with the Securities and Exchange Commission.

Table of Contents

WEIS MARKETS, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative Disclosure - There have been no material changes in the ~~Company's~~Company’s market risk during the fiscal quarter ended September ~~30, 2017.~~24, 2022. Quantitative information is set forth in Item 7a on the Company’s Annual Report on Form 10-K under the caption “Quantitative and Qualitative Disclosures About Market Risk,” which was filed for the fiscal year ended December ~~31, 2016~~25, 2021, and is incorporated herein by reference.

Qualitative Disclosure - This information is set forth in the ~~Company's~~Company’s Annual Report on Form 10-K under the caption “Liquidity and Capital Resources,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed for the fiscal year ended December ~~31, 2016~~25, 2021, and is incorporated herein by reference.

ITEM 4. CONTROLS AND PROCEDURES

The Chief Executive Officer and the Chief Financial Officer, together with the Company’s Disclosure Committee, evaluated the Company’s disclosure controls and procedures as of the fiscal quarter ended September ~~30, 2017.~~24, 2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports was accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

In connection with the evaluation described above, there was no change in the Company’s internal control over financial reporting during the fiscal quarter ended September ~~30, 2017,~~24, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Table of Contents

WEIS MARKETS, INC.

PART II – OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibits


	~~Exhibits~~ ~~Exhibit 31.1 Rule 13a-14(a) Certification - CEO~~ ~~Exhibit 31.2 Rule 13a-14(a) Certification - CFO~~ 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

Table of Contents

WEIS MARKETS, INC.

SIGNATURES

Pursuant to the requirements 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.


		WEIS MARKETS, INC.
		~~WEIS MARKETS, INC.~~
		(Registrant)

Date:	11/~~7/2017~~3/2022	/S/Jonathan H. Weis
		Jonathan H. Weis
		Chairman,
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	11/~~7/2017~~3/2022	/S/~~Scott F. Frost~~Michael T. Lockard
		~~Scott F. Frost~~Michael T. Lockard
		Senior Vice President, Chief Financial Officer
		and Treasurer
		(Principal Financial Officer)



(dollars in thousands)		September 30, 2017		December 31, 2016
Assets
Current:
Cash and cash equivalents	$	20,154	$	14,653
Marketable securities		63,921		67,171
SERP investment		13,607		11,154
Accounts receivable, net		71,629		96,170
Inventories		268,170		276,783
Prepaid expenses and other current assets		20,134		16,310
Income taxes recoverable		1,748		1,625
Total current assets		459,363		483,866
Property and equipment, net		874,777		878,195
Goodwill		52,330		52,330
Intangible and other assets, net		19,478		16,913
Total assets	$	1,405,948	$	1,431,304

Liabilities
Current:
Accounts payable	$	186,580	$	199,159
Accrued expenses		34,744		50,947
Accrued self-insurance		14,121		19,330
Deferred revenue, net		4,931		6,730
Total current liabilities		240,376		276,166
Long-term debt		52,086		64,476
Postretirement benefit obligations		16,343		15,277
Accrued self-insurance		21,671		21,353
Deferred income taxes		128,377		119,445
Other		9,671		7,865
Total liabilities		468,524		504,582
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		1,073,330		1,062,778
Accumulated other comprehensive income
(Net of deferred taxes of $3,452 in 2017 and $3,382 in 2016)		5,002		4,852
		1,088,281		1,077,579
Treasury stock at cost, 6,149,364 shares		(150,857)		(150,857)
Total shareholders’ equity		937,424		926,722
Total liabilities and shareholders’ equity	$	1,405,948	$	1,431,304



	13 Weeks Ended				39 Weeks Ended
(dollars in thousands, except shares and per share amounts)	September 30, 2017		September 24, 2016		September 30, 2017		September 24, 2016
Net sales	$	854,261	$	742,986	$	2,583,059	$	2,211,622
Cost of sales, including warehousing and distribution expenses		631,422		538,122		1,890,545		1,597,709
Gross profit on sales		222,839		204,864		692,514		613,913
Operating, general and administrative expenses		216,645		188,901		638,352		542,624
Income from operations		6,194		15,963		54,162		71,289
Investment income and interest expense		657		666		1,893		1,985
Income before provision for income taxes		6,851		16,629		56,055		73,274
Provision for income taxes		2,402		6,001		21,295		27,253
Net income	$	4,449	$	10,628	$	34,760	$	46,021

Weighted-average shares outstanding, basic and diluted		26,898,443		26,898,443		26,898,443		26,898,443
Cash dividends per share	$	0.30	$	0.30	$	0.90	$	0.90
Basic and diluted earnings per share	$	0.16	$	0.40	$	1.29	$	1.71



			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
September 30, 2017	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities	$	1,198	$	7,487	$	-	$	8,685
Level 2
Municipal bonds		54,269		1,048		(81)		55,236
	$	55,467	$	8,535	$	(81)	$	63,921



		Amounts Reclassified from
		Accumulated Other Comprehensive Income to the
		Consolidated Statements of Income
		13 Weeks Ended				39 Weeks Ended
(dollars in thousands)	Location	September 30, 2017		September 24, 2016		September 30, 2017		September 24, 2016
Unrealized gains (losses) on available-for-sale marketable securities
	Investment income and interest expense	$	(5)	$	169	$	(5)	$	438
	Provision for income taxes		2		(70)		2		(181)
Total amount reclassified, net of tax		$	(3)	$	99	$	(3)	$	257


	13 Weeks Ended				39 Weeks Ended
				Pro Forma				Pro Forma
(dollars in thousands)	September 30, 2017		September 24, 2016		September 30, 2017		September 24, 2016
Sales	$	854,261	$	867,149	$	2,583,059	$	2,616,117



Analysis of Consolidated Statements of Income

													Percentage Changes
	13 Weeks Ended						39 Weeks Ended						2017 vs. 2016			2017 vs. 2016
(dollars in thousands except per share amounts)	September 30, 2017			September 24, 2016			September 30, 2017			September 24, 2016			13 Weeks Ended			39 Weeks Ended
Net sales	$	854,261		$	742,986		$	2,583,059		$	2,211,622			15.0	%		16.8	%
Cost of sales, including warehousing and distribution expenses		631,422			538,122			1,890,545			1,597,709			17.3			18.3
Gross profit on sales		222,839			204,864			692,514			613,913			8.8			12.8
Gross profit margin		26.1	%		27.6	%		26.8	%		27.8	%
Operating, general and administrative expenses		216,645			188,901			638,352			542,624			14.7			17.6
O, G & A, percent of net sales		25.4	%		25.4	%		24.7	%		24.5	%
Income from operations		6,194			15,963			54,162			71,289			(61.2)			(24.0)
Operating margin		0.7	%		2.1	%		2.1	%		3.2	%
Investment income and interest expense		657			666			1,893			1,985			(1.4)			(4.6)
Investment income and interest expense, percent of net sales		0.1	%		0.1	%		0.1	%		0.1	%
Income before provision for income taxes		6,851			16,629			56,055			73,274			(58.8)			(23.5)
Income before provision for income taxes, percent of net sales		0.8	%		2.2	%		2.2	%		3.3	%
Provision for income taxes		2,402			6,001			21,295			27,253			(60.0)			(21.9)
Effective income tax rate		35.1	%		36.1	%		38.0	%		37.2	%
Net income	$	4,449		$	10,628		$	34,760		$	46,021			(58.1)	%		(24.5)	%
Net income, percent of net sales		0.5	%		1.4	%		1.3	%		2.1	%
Basic and diluted earnings per share	$	0.16		$	0.40		$	1.29		$	1.71			(60.0)	%		(24.6)	%



	39 Weeks Ended
(dollars in thousands)	Increase		Increase (Decrease)
September 30, 2017	(Decrease)		as a % of sales
Employee-related expenses	$	50,756	(0.2)	%
Depreciation and amortization		6,724	(0.1)
Advertising		4,381	0.1
Financial transaction fees		5,171	0.1
Rent expense		7,491	0.1
Third-party services and repairs	$	14,991	0.2	%