UNITED STATES
‎

SECURITIES AND EXCHANGE COMMISSION
‎

WASHINGTON, D.C. 20549

FORM 10-Q

~~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 June 26, 2021

	[ ]	~~For the quarterly period ended~~ ~~June 27, 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~~

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
(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
~~1000 S. Second Street~~ ‎~~P. O. Box 471~~ ‎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] ~~[X]~~No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes [X] ~~[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 [ ]		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 August 5, ~~2020,~~2021, there were issued and outstanding 26,898,443 shares of the registrant’s common stock.

‎

WEIS MARKETS, INC.

TABLE OF CONTENTS


FORM 10-Q		Page
Part I. Financial Information
~~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~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	11	10
Item 3. Quantitative and Qualitative Disclosures about Market Risk	18	17
Item 4. Controls and Procedures	18	17
Part II. Other Information
~~Item 1a. Risk Factors~~	19
Item 6. Exhibits	20	18
Signatures	21	19
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

CONSOLIDATED BALANCE SHEETS

(unaudited)

~~(unaudited)~~


(amounts in thousands, except shares)	June 26, 2021		December 26, 2020
Assets
Current:
Cash and cash equivalents	$	141,205	$	136,612
Marketable securities		115,541		111,855
SERP investment		26,329		22,764
Accounts receivable, net		42,109		56,760
Inventories		262,959		269,024
Prepaid expenses and other current assets		26,314		29,187
Total current assets		614,457		626,202
Property and equipment, net		946,060		924,429
Operating lease right-to-use		195,392		199,901
Goodwill		52,330		52,330
Intangible and other assets, net		17,274		17,559
Total assets	$	1,825,513	$	1,820,421

Liabilities
Current:
Accounts payable	$	186,991	$	221,566
Accrued expenses		39,195		50,591
Operating leases		39,573		39,165
Accrued self-insurance		21,386		19,306
Deferred revenue, net		7,396		10,583
Income taxes payable		13,282		5,058
Total current liabilities		307,823		346,269
Postretirement benefit obligations		28,719		25,757
Accrued self-insurance		20,275		20,297
Operating leases		163,786		169,064
Deferred income taxes		107,086		103,404
Other		11,239		9,515
Total liabilities		638,928		674,306
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		1,324,787		1,283,737
Accumulated other comprehensive income (Net of deferred taxes of $1,070 in 2021 and $1,299 in 2020)		2,706		3,286
		1,337,442		1,296,972
Treasury stock at cost, 6,149,364 shares		(150,857)		(150,857)
Total shareholders’ equity		1,186,585		1,146,115
Total liabilities and shareholders’ equity	$	1,825,513	$	1,820,421

(dollars in thousands)
June 27, 2020
December 28, 2019
Assets
Current:
Cash and cash equivalents
$
108,660
$
66,871
Marketable securities
97,256
63,538
SERP investment
19,230
18,935
Accounts receivable, net
48,541
55,764
Inventories
278,456
279,806
Prepaid expenses and other current assets
26,236
23,378
Total current assets
578,379
508,292
Property and equipment, net
887,285
886,928
Operating lease right-to-use
202,840
210,196
Goodwill
52,330
52,330
Intangible and other assets, net
18,296
17,816
Total assets
$
1,739,130
$
1,675,562
Liabilities
Current:
Accounts payable
$
181,088
$
180,718
Accrued expenses
35,778
39,528
Operating leases
38,048
39,114
Accrued self-insurance
17,282
15,719
Deferred revenue, net
6,244
8,662
Income taxes payable
32,878
8,197
Total current liabilities
311,318
291,938
Postretirement benefit obligations
21,822
22,143
Accrued self-insurance
17,616
17,625
Operating leases
172,970
179,654
Deferred income taxes
96,416
97,041
Other
7,641
8,416
Total liabilities
627,783
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
1,249,657
1,198,173
Accumulated other comprehensive income
(Net of deferred taxes of $1,026 in 2020 and $593 in 2019)
2,598
1,480
1,262,204
1,209,602
Treasury stock at cost, 6,149,364 shares
(150,857)
(150,857)
Total shareholders’ equity
1,111,347
1,058,745
Total liabilities and shareholders’ equity
$
1,739,130
$
1,675,562

See accompanying notes to Consolidated Financial Statements.

‎

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

~~(unaudited)~~


		13 Weeks Ended			26 Weeks Ended
(amounts in thousands, except shares and per share amounts)		June 26, 2021		June 27, 2020	June 26, 2021		June 27, 2020
Net sales	$	1,047,349	$	1,098,704	$	2,053,689	$	2,084,524
Cost of sales, including advertising, warehousing and distribution expenses		766,157		805,816		1,505,108		1,527,489
Gross profit on sales		281,192		292,888		548,581		557,035
Operating, general and administrative expenses		235,633		236,886		471,189		463,605
Income from operations		45,559		56,002		77,392		93,430
Investment income (loss) and interest expense		2,140		3,066		3,752		(953)
Other income (expense)		(1,831)		(2,618)		(2,606)		58
Income before provision for income taxes		45,868		56,450		78,538		92,535
Provision for income taxes		12,396		14,978		20,811		24,374
Net income	$	33,472	$	41,472	$	57,727	$	68,161

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	$	0.62	$	0.62
Basic and diluted earnings per share	$	1.24	$	1.54	$	2.15	$	2.53

13 Weeks Ended
26 Weeks Ended
(dollars in thousands, except shares and per share amounts)
June 27, 2020
June 29, 2019
June 27, 2020
June 29, 2019
Net sales
$
1,098,704
$
887,967
$
2,084,524
$
1,764,686
Cost of sales, including advertising, warehousing and distribution expenses
805,816
651,297
1,527,489
1,298,463
Gross profit on sales
292,888
236,670
557,035
466,223
Operating, general and administrative expenses
236,886
210,373
463,605
422,105
Income from operations
56,002
26,297
93,430
44,118
Investment income (loss) and interest expense
3,066
1,079
(953)
3,975
Other income (expense)
(2,618)
(428)
58
(2,270)
Income before provision for income taxes
56,450
26,948
92,535
45,823
Provision for income taxes
14,978
6,473
24,374
11,043
Net income
$
41,472
$
20,475
$
68,161
$
34,780
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
$
0.62
$
0.62
Basic and diluted earnings per share
$
1.54
$
0.76
$
2.53
$
1.29

See accompanying notes to Consolidated Financial Statements.

‎

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

~~(unaudited)~~


	13 Weeks Ended				26 Weeks Ended
(amounts in thousands)	June 26, 2021		June 27, 2020		June 26, 2021		June 27, 2020
Net income	$	33,472	$	41,472	$	57,727	$	68,161
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 $77 and $396, respectively for the thirteen weeks ended and $229 and $433, respectively for the twenty-six weeks ended)		195		1,023		(580)		1,118
Reclassification adjustment for (gains) losses included in net income (Net of deferred taxes of $0 and $2, respectively for the thirteen weeks ended and $0 and $0, respectively for the twenty-six weeks ended)		—		6		—		—
Other comprehensive income gain (loss), net of tax		195		1,029		(580)		1,118
Comprehensive income, net of tax	$	33,667	$	42,501	$	57,147	$	69,279

13 Weeks Ended
26 Weeks Ended
(dollars in thousands)
June 27, 2020
June 29, 2019
June 27, 2020
June 29, 2019
Net income
$
41,472
$
20,475
$
68,161
$
34,780
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 $396 and $179, respectively for the thirteen weeks ended and $433 and $423, respectively for the twenty-six weeks ended)
1,023
454
1,118
1,075
Reclassification adjustment for (gains) losses included in net income
(Net of deferred taxes of $2 and $0, respectively for the thirteen weeks ended and $0 and $0, respectively for the twenty-six weeks ended)
6
-
-
-
Other comprehensive income gain (loss), net of tax
1,029
454
1,118
1,075
Comprehensive income, net of tax
$
42,501
$
20,929
$
69,279
$
35,855

See accompanying notes to Consolidated Financial Statements.

‎

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(unaudited)

~~(unaudited)~~


						Accumulated
(amounts in thousands, except shares)						Other						Total
For the Thirteen Weeks Ended	Common Stock			Retained		Comprehensive		Treasury Stock				Shareholders’
June 26, 2021 and June 27, 2020	Shares	Amount		Earnings		Income (Loss)		Shares		Amount		Equity
Balance at March 27, 2021	33,047,807	$	9,949	$	1,299,653	$	2,512		6,149,364	$	(150,857)	$	1,161,257
Net Income	—		—		33,472		—		—		—		33,472
Other comprehensive income, net of reclassification adjustments and tax	—		—		—		195		—		—		195
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at June 26, 2021	33,047,807	$	9,949	$	1,324,787	$	2,706		6,149,364	$	(150,857)	$	1,186,585

Balance at March 28, 2020	33,047,807	$	9,949	$	1,216,524		1,569		6,149,364	$	(150,857)	$	1,077,185
Net income	—		—		41,472		—		—		—		41,472
Other comprehensive income, net of reclassification adjustments and tax	—		—		—		1,029		—		—		1,029
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at June 27, 2020	33,047,807	$	9,949	$	1,249,657	$	2,598		6,149,364	$	(150,857)	$	1,111,347


						Accumulated
(amounts in thousands, except shares)						Other					Total
For the Twenty-Six weeks Ended	Common Stock			Retained		Comprehensive		Treasury Stock			Shareholders’
June 26, 2021 and June 27, 2020	Shares	Amount		Earnings		Income (Loss)		Shares	Amount		Equity
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	—		—		57,727		—	—		—		57,727
Other comprehensive income, net of reclassification adjustments and tax	—		—		—		(580)	—		—		(580)
Dividends paid	—		—		(16,677)		—	—		—		(16,677)
Balance at June 26, 2021	33,047,807	$	9,949	$	1,324,787	$	2,706	6,149,364	$	(150,857)	$	1,186,585

Balance at December 28, 2019	33,047,807	$	9,949	$	1,198,173		1,480	6,149,364	$	(150,857)	$	1,058,745
Net income	—		—		68,161		—	—		—		68,161
Other comprehensive income, net of reclassification adjustments and tax	—		—		—		1,118	—		—		1,118
Dividends paid	—		—		(16,677)		—	—		—		(16,677)
Balance at June 27, 2020	33,047,807	$	9,949	$	1,249,657	$	2,598	6,149,364	$	(150,857)	$	1,111,347

Accumulated
(dollars in thousands, except shares)
Other
Total
For Thirteen Weeks Ended
Common Stock
Retained
Comprehensive
Treasury Stock
Shareholders’
June 27, 2020 and June 29, 2019
Shares
Amount
Earnings
Income (Loss)
Shares
Amount
Equity
Balance at March 28, 2020
33,047,807
$
9,949
$
1,216,524
$
1,569
6,149,364
$
(150,857)
$
1,077,185
Net Income
—
—
41,472
—
—
—
41,472
Other comprehensive income, net of
reclassification adjustments and tax
—
—
—
1,029
—
—
1,029
Dividends paid
—
—
(8,339)
—
—
—
(8,339)
Balance at June 27, 2020
33,047,807
$
9,949
$
1,249,657
$
2,598
6,149,364
$
(150,857)
$
1,111,347
Balance at March 30, 2019
33,047,807
$
9,949
$
1,169,510
$
883
6,149,364
$
(150,857)
$
1,029,485
Net income
—
—
20,475
—
—
—
20,475
Other comprehensive income, net of
reclassification adjustments and tax
—
—
—
454
—
—
454
Dividends paid
—
—
(8,339)
—
—
—
(8,339)
Balance at June 29, 2019
33,047,807
$
9,949
$
1,181,647
$
1,337
6,149,364
$
(150,857)
$
1,042,076

Accumulated
(dollars in thousands, except shares)
Other
Total
For the Twenty-Six weeks Ended
Common Stock
Retained
Comprehensive
Treasury Stock
Shareholders’
June 27, 2020 and June 29, 2019
Shares
Amount
Earnings
Income (Loss)
Shares
Amount
Equity
Balance at December 28, 2019
33,047,807
$
9,949
$
1,198,173
$
1,480
6,149,364
$
(150,857)
$
1,058,745
Net Income
—
—
68,161
—
—
—
68,161
Other comprehensive income, net of
reclassification adjustments and tax
—
—
—
1,118
—
—
1,118
Dividends paid
—
—
(16,677)
—
—
—
(16,677)
Balance at June 27, 2020
33,047,807
$
9,949
$
1,249,657
$
2,598
6,149,364
$
(150,857)
$
1,111,347
Balance at December 29, 2018
33,047,807
$
9,949
$
1,163,545
$
262
6,149,364
$
(150,857)
$
1,022,899
Net income
—
—
34,780
—
—
—
34,780
Other comprehensive income, net of
reclassification adjustments and tax
—
—
—
1,075
—
—
1,075
Dividends paid
—
—
(16,677)
—
—
—
(16,677)
Balance at June 29, 2019
33,047,807
$
9,949
$
1,181,647
$
1,337
6,149,364
$
(150,857)
$
1,042,076

See accompanying notes to Consolidated Financial Statements.

‎

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

~~(unaudited)~~


	26 Weeks Ended
(amounts in thousands)	June 26, 2021		June 27, 2020
Cash flows from operating activities:
Net income	$	57,727	$	68,161
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		51,270		47,794
(Gain) loss on disposition of fixed assets		402		1,858
Unrealized (gain) loss in value of equity securities		82		2,013
Deferred income taxes		3,911		(1,057)
Unrealized (gain) loss in SERP		(1,768)		383
Changes in operating assets and liabilities:
Inventories		6,064		1,351
Accounts receivable and prepaid expenses		17,525		4,365
Accounts payable and other liabilities		(43,899)		(6,302)
Income taxes		8,225		24,682
Other		305		(4,173)
Net cash provided by operating activities		99,844		139,075
Cash flows from investing activities:
Purchase of property and equipment		(77,750)		(49,731)
Proceeds from the sale of property and equipment		5,745		277
Purchase of marketable securities		(13,385)		(33,194)
Proceeds from the sale and maturities of marketable securities		8,630		2,675
Purchase of intangible assets		(17)		41
Change in SERP investment		(1,797)		(677)
Net cash used in investing activities		(78,574)		(80,609)
Cash flows from financing activities:
Dividends paid		(16,677)		(16,677)
Net cash used in financing activities		(16,677)		(16,677)
Net increase in cash and cash equivalents		4,593		41,789
Cash and cash equivalents at beginning of year		136,612		66,871
Cash and cash equivalents at end of period	$	141,205	$	108,660

26 Weeks Ended
(dollars in thousands)
June 27, 2020
June 29, 2019
Cash flows from operating activities:
Net income
$
68,161
$
34,780
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
47,794
46,324
Loss on disposition of fixed assets
1,858
806
Unrealized (gain) loss in value of equity securities
2,013
(848)
Deferred income taxes
(1,057)
(482)
Unrealized (gain) loss in SERP
383
(1,360)
Changes in operating assets and liabilities:
Inventories
1,351
14,413
Accounts receivable and prepaid expenses
4,365
10,762
Accounts payable and other liabilities
(6,302)
(29,423)
Income taxes
24,682
2,147
Other
(4,173)
487
Net cash provided by operating activities
139,075
77,606
Cash flows from investing activities:
Purchase of property and equipment
(49,731)
(44,335)
Proceeds from the sale of property and equipment
277
1,320
Purchase of marketable securities
(33,194)
(4,205)
Proceeds from the sale and maturities of marketable securities
2,675
2,785
Purchase of intangible assets
41
(540)
Change in SERP investment
(677)
(2,116)
Net cash used in investing activities
(80,609)
(47,091)
Cash flows from financing activities:
Dividends paid
(16,677)
(16,677)
Net cash used in financing activities
(16,677)
(16,677)
Net increase (decrease) in cash and cash equivalents
41,789
13,838
Cash and cash equivalents at beginning of year
66,871
37,808
Cash and cash equivalents at end of period
$
108,660
$
51,646

See accompanying notes to Consolidated Financial Statements. In the first twenty-six weeks of ~~2020,~~2021, there was ~~$750 thousand~~$8.7 million cash paid for income taxes compared to ~~$9.4 million~~$750 thousand in ~~2019~~2020 for the same period. Cash paid for interest related to long-term debt was ~~$19~~$16 thousand and ~~$49~~$19 thousand in the first twenty-six weeks of 2021 and 2020, ~~and 2019,~~ respectively.

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

~~(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

The Company regularly monitors recently issued accounting standards and assesses their applicability and impact. The Company believes that there are no accounting standard updates that have or will have a material or significant impact on the ~~Company's~~Company’s accounting policies.

(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 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 portfolio throughout the life of each bond held. Dividends from the equity securities are recognized as received. Interest, dividends and unrealized gains and losses on equity securities are recognized in “Investment income (loss) and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of ~~$3.1 million~~$318 thousand in the ~~second quarter of 2020,~~thirteen weeks ended June 26, 2021, which included an unrealized loss in equity securities of ~~$91~~$320 thousand. In the thirteen weeks ~~ending~~ended June ~~29, 2019,~~27, 2020, the Company recognized investment income of ~~$1.1 million,~~$458 thousand, which included an unrealized ~~gains~~loss in equity securities of ~~$223~~$91 thousand. In the twenty-six weeks ~~ending~~ended June 26, 2021, the Company recognized investment income of $1.2 million, which included unrealized loss in equity securities of $82 thousand. In the twenty-six weeks ended June 27, 2020, the Company recognized investment losses of ~~$934~~$876 thousand, which included unrealized losses in equity securities of $2 million.~~In the twenty-six weeks ending June 29, 2019, the Company recognized investment income of $4 million, which included unrealized gains in equity securities of $848 thousand.~~

‎

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

~~(unaudited)~~

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

Marketable securities, as of June ~~27, 2020~~26, 2021 and December ~~28, 2019,~~26, 2020, consisted of:


			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
June 26, 2021	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	7,328
Level 2
Corporate and municipal bonds	$	104,437	$	5,040	$	(1,264)		108,213
	$	104,437	$	5,040	$	(1,264)	$	115,541


			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
December 26, 2020	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	7,410
Level 2
Corporate and municipal bonds	$	99,861	$	5,723	$	(1,139)		104,445
	$	99,861	$	5,723	$	(1,139)	$	111,855

Gross
Gross
(dollars in thousands)
Amortized
Unrealized
Unrealized
Fair
June 27, 2020
Cost
Holding Gains
Holding Losses
Value
Available-for-sale:
Level 1
Equity securities
$
7,188
Level 2
Municipal bonds
$
86,445
$
4,535
$
(912)
90,068
$
86,445
$
4,535
$
(912)
$
97,256

Gross
Gross
(dollars in thousands)
Amortized
Unrealized
Unrealized
Fair
December 28, 2019
Cost
Holding Gains
Holding Losses
Value
Available-for-sale:
Level 1
Equity securities
$
9,201
Level 2
Municipal bonds
$
52,264
$
2,091
$
(18)
54,337
$
52,264
$
2,091
$
(18)
$
63,538

Maturities of marketable securities classified as available-for-sale at June ~~27, 2020,~~26, 2021, were as follows:
‎


		Amortized		Fair
(dollars in thousands)		Cost		Value

					Amortized		Fair
(amounts in thousands)					Cost		Value
Available-for-sale:
Due within one year	$	8,072	$	8,108	$	7,086	$	7,123
Due after one year through five years		33,173		34,491		45,031		46,693
Due after five years through ten years		45,200		47,469		52,320		54,397
	$	86,445	$	90,068
					$	104,437	$	108,213

SERP Investments

The Company also maintains a non-qualified supplemental executive retirement 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 income of $1.8 million in the thirteen weeks ended June 26, 2021, and investment income of $2.6 million in the same period in 2020. The Company recognized investment income of $2.6 million and investment loss of $58 thousand in the twenty-six weeks ended June 26, 2021, and June 27, 2020, respectively. The changes in the underlying liability to the associates are recorded in “Other income (expense).”

‎

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)
~~(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 (Losses)
	on Available-for-Sale
(amounts in thousands)	Marketable Securities
Accumulated other comprehensive income balance as of December 26, 2020	$	3,286

Other comprehensive loss before reclassifications		(580)
Net current period change in other comprehensive income		(580)
Accumulated other comprehensive income balance as of June 26, 2021	$	2,706



		~~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~~		~~1,118~~
~~Amounts reclassified from accumulated other comprehensive income~~		-
~~Net current period change in other comprehensive income~~		~~1,118~~
~~Accumulated other comprehensive income balance as of June 27, 2020~~	$	~~2,598~~

The following table sets forth the effects on net income of the amounts reclassified out of accumulated other comprehensive income for the periods ended June ~~27, 2020~~26, 2021, and June ~~29, 2019.~~27, 2020.


		Amounts Reclassified from
		Accumulated Other Comprehensive Income to the
		Consolidated Statements of Income
		13 Weeks Ended				26 Weeks Ended
(amounts in thousands)	Location	June 26, 2021		June 27, 2020		June 26, 2021		June 27, 2020
Unrealized gains (losses) on available-for-sale marketable securities
	Investment income (loss) and interest expense	$	—	$	8	$	—	$	—
	Provision for income taxes		—		(2)		—		—
Total amount reclassified, net of tax		$	—	$	6	$	—	$	—



		~~Amounts Reclassified from~~
		~~Accumulated Other Comprehensive Income to the~~
		~~Consolidated Statements of Income~~
		~~13 Weeks Ended~~				~~26 Weeks Ended~~
~~(dollars in thousands)~~	~~Location~~	~~June 27, 2020~~		~~June 29, 2019~~		~~June 27, 2020~~		~~June 29, 2019~~
~~Unrealized gains (losses) on available-for-sale marketable securities~~
	~~Investment income (loss) and interest expense~~	$	8	$	-	$	-	$	-
	~~Provision for income taxes~~		~~(2)~~		-		-		-
~~Total amount reclassified, net of tax~~		$	6	$	-	$	-	$	-

(5) Long-Term Debt

On September 1, 2016, Weis Markets entered into a revolving credit agreement with Wells Fargo Bank, National Association (the “Credit Agreement”), which was amended on August 21, 2019, and matures on September 1, 2022. The Credit Agreement provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed $30.0 million with an additional discretionary amount available of $70.0 million. As of June ~~27, 2020,~~26, 2021, the availability under the revolving credit agreement was ~~$24.0~~$25.3 million, net of ~~$6.0~~$4.7 million letters of credit. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company. The Company has not had an obligation on the Credit Agreement since the second fiscal quarter of 2018.

Interest expense related to long-term debt was ~~$10~~$8 thousand and ~~$14~~$10 thousand in the thirteen weeks ended June ~~27, 2020~~26, 2021, and June ~~29, 2019,~~27, 2020, respectively. In the first twenty-six weeks of ~~2020~~2021 and ~~2019,~~2020, interest expense related to long-term debt totaled $16 thousand and $18 thousand, ~~and $33 thousand,~~ respectively.

‎

Table of Contents

WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)
~~(unaudited)~~

(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 ~~product,~~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 twenty-six ~~week periods ending~~weeks ended June 26, 2021, and June 27, ~~2020 and June 29, 2019:~~2020:


	13 Weeks Ended
(amounts in thousands)	June 26, 2021				June 27, 2020
Grocery	$	900,009	85.9	%	$	987,502	89.9	%
Pharmacy		101,471	9.7			85,808	7.8
Fuel		43,826	4.2			23,129	2.1
Manufacturing		2,043	0.2			2,265	0.2
Total net sales	$	1,047,349	100.0	%	$	1,098,704	100.0	%



	26 Weeks Ended
(amounts in thousands)	June 26, 2021				June 27, 2020
Grocery	$	1,774,083	86.4	%	$	1,851,249	88.9	%
Pharmacy		197,068	9.6			175,142	8.4
Fuel		78,197	3.8			53,096	2.5
Manufacturing		4,341	0.2			5,037	0.2
Total net sales	$	2,053,689	100.0	%	$	2,084,524	100.0	%

13 Weeks Ended
(dollars in thousands)
June 27, 2020
June 29, 2019
Grocery
$
987,502
89.9
%
$
767,886
86.6
%
Pharmacy
85,808
7.8
84,682
9.5
Fuel
23,129
2.1
33,271
3.7
Manufacturing
2,265
0.2
2,128
0.2
Total net sales
$
1,098,704
100.0
%
$
887,967
100.0
%

26 Weeks Ended
(dollars in thousands)
June 27, 2020
June 29, 2019
Grocery
$
1,851,249
88.9
%
$
1,534,787
87.0
%
Pharmacy
175,142
8.4
166,463
9.4
Fuel
53,096
2.5
59,736
3.4
Manufacturing
5,037
0.2
3,700
0.2
Total net sales
$
2,084,524
100.0
%
$
1,764,686
100.0
%

(7) Leases

As of June ~~27, 2020,~~26, 2021, the Company leased approximately ~~51%~~50% of its open store facilities under operating leases that expire at various dates through ~~2035,~~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 twenty-six weeks ended June ~~27, 2020~~26, 2021, and June ~~29, 2019.~~27, 2020.


	13 Weeks Ended				26 Weeks Ended
(amounts in thousands)	June 26, 2021		June 27, 2020		June 26, 2021		June 27, 2020
Operating lease cost	$	11,201	$	11,546	$	22,518	$	23,050
Variable lease cost		2,550		2,867		5,248		5,534
Lease or sublease income		(2,614)		(2,133)		(4,923)		(4,170)
Net lease cost	$	11,137	$	12,280	$	22,843	$	24,414

13 weeks ended
26 weeks ended
(dollars in thousands)
June 27, 2020
June 29, 2019
June 27, 2020
June 29, 2019
Operating lease cost
$
11,546
$
11,415
23,050
$
23,056
Variable lease cost
2,867
2,911
5,534
5,554
Lease or sublease income
(2,133)
(1,976)
(4,170)
(3,850)
Net lease cost
$
12,280
$
12,350
$
24,414
$
24,760

‎

Table of Contents

WEIS MARKETS, INC.

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~(8) Prior Year Reclassification~~

As of December 28, 2019, the Company reclassified non-service components of the Supplemental Executive Retirement Plan (SERP) benefit obligation separately from the service cost component. These non-service components totaling $2.3 million as of June 29, 2019 were reclassified to “Other income (expense)”. The Company recognizes service cost components in “Operating, general and administrative costs”.

~~The tables below summarize the effects of the reclassifications of previously reported Consolidated Financial Statements for the fiscal quarter ended June 27, 2020.~~

13 Weeks Ended
June 29, 2019
Consolidated Statements of Income
As Previously
(dollars in thousands)
Reported
Reclassifications
As Adjusted
Operating, general and administrative expenses
$
210,801
$
(428)
$
210,373
Income from operations
25,869
428
26,297
Other income (expense)
-
(428)
(428)

26 Weeks Ended
June 29, 2019
Consolidated Statements of Income
As Previously
(dollars in thousands)
Reported
Reclassifications
As Adjusted
Operating, general and administrative expenses
$
424,375
$
(2,270)
$
422,105
Income from operations
41,848
2,270
44,118
Other income (expense)
-
(2,270)
(2,270)

26 Weeks Ended
June 29, 2019
Consolidated Statements of Cash Flows
As Previously
(dollars in thousands)
Reported
Reclassifications
As Adjusted
Unrealized (gain) loss in SERP
$
-
$
(1,360)
$
(1,360)
Net cash provided by operating activities
78,966
(1,360)
77,606
Change in SERP investment
(3,476)
1,360
(2,116)
Net cash used in investing activities
(48,451)
1,360
(47,091)

~~(9) COVID-19~~

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. Additionally, in March 2020, state governments in the Company’s geographic operating area began instituting preventative shut down measures in order to combat the novel coronavirus pandemic. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the novel coronavirus pandemic.

The Company’s business being deemed essential resulted in incremental financial performance that may not be indicative of future financial results and there remains uncertainty and increased risks concerning its employees, customers, supply chain and government regulation (see Forward-Looking Statements).

~~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 ~~28, 2019,~~26, 2020, 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 197 retail stores with ~~over 24,500~~approximately 23 thousand associates located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. Its products 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 weekly and monthly 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, Low Price; 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 fuel station partners.

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. Additionally, in March 2020, state governments in the Company’s geographic operating area began instituting preventative shut down measures in order to combat the novel coronavirus pandemic. The Company’s business was deemed essential and thus its stores have remained open during this time period, and sales, costs and profits have increased. Although the Company sees similar sales and profit results extending into the beginning of the next quarter, the 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. The closure of other food sources and government stimulus payments to affected individuals have been accretive to our sales; however, the Company also faces new and increased risks concerning its employees, government regulation and supply chain (see Forward-Looking Statements, below).

The Company advertises its products and promotes its brand through radio ads; e-mail blasts; and on-line via its web site, social media and mobile applications. Printed circulars have been used extensively on a weekly basis to advertise featured items. The Company promotes by using Everyday Lower Price, Low Price Guarantee, Low, Low Price and utilizes a loyalty marketing program, “Weis Club Preferred Shopper,” which enables customers to receive discounts, promotions and in-store and fuel rewards. During the current novel coronavirus pandemic, the Company has reduced its use of weekly newspaper circulars which resulted in a cost savings. At this point the Company has not determined if its use of printed circulars will be increased after the end of the pandemic.

Utilizing its own centrally located distribution center and transportation fleet, Weis Markets self distributes approximately 67% 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 primarily for the Company’s stores but serve other companies as well. The corporate offices are located in Sunbury, PA 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 ~~has implemented current CDC guidelines~~is not able to ~~attempt to ensure~~speculate how the ~~continuity of its distribution center and fleet.~~ensuing economy or unknown future related expenses will affect it after the governmental novel coronavirus pandemic measures have ended.

The Company continues to 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. ~~In the second quarter~~As of ~~2020,~~June 26, 2021, the Company offered Weis 2 Go Online curbside pickup in ~~177~~188 of its locations as well as home delivery with Shipt in ~~175~~177 different locations. ~~During~~Sales in the first 26twenty-six weeks of ~~2020, ecommerce sales~~2021 through Weis 2 Go Online have increased ~~141%~~over 32% percent when compared to the same period ~~in 2019.~~

‎last year.

Table of Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Two-Year StackedComparable Store Sales Analysis

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.

~~(continued)~~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 June 26, 2021, and June 27, 2020, as well as periods ended June 27, 2020, and June 29, 2019, respectively.


	Percentage Changes
	13 Weeks Ended
		2021 vs. 2020		2020 vs. 2019
Comparable store sales (individual year)		(5.8)	%	24.1	%
Comparable store sales (two-year stacked)		18.3
Comparable store sales, excluding fuel (individual year)		(7.7)		26.4	%
Comparable store sales, excluding fuel (two-year stacked)		18.7	%

	Percentage Changes
	26 Weeks Ended
		2021 vs. 2020		2020 vs. 2019
Comparable store sales (individual year)		(2.4)	%	18.5	%
Comparable store sales (two-year stacked)		16.1
Comparable store sales, excluding fuel (individual year)		(3.6)		19.7	%
Comparable store sales, excluding fuel (two-year stacked)		16.1	%

~~Results of Operations~~

Analysis of Consolidated Statements of Income
Percentage Changes
13 Weeks Ended
26 Weeks Ended
2020 vs. 2019
2020 vs. 2019
(dollars in thousands except per share amounts)
June 27, 2020
June 29, 2019
June 27, 2020
June 29, 2019
13 Weeks Ended
26 Weeks Ended
Net sales
$
1,098,704
$
887,967
$
2,084,524
$
1,764,686
23.7
%
18.1
%
Cost of sales, including advertising, warehousing and distribution expenses
805,816
651,297
1,527,489
1,298,463
23.7
17.6
Gross profit on sales
292,888
236,670
557,035
466,223
23.8
19.5
Gross profit margin
26.7
%
26.7
%
26.7
%
26.4
%
Operating, general and administrative expenses
236,886
210,373
463,605
422,105
12.6
9.8
O, G & A, percent of net sales
21.6
%
23.7
%
22.2
%
23.9
%
Income from operations
56,002
26,297
93,430
44,118
113.0
111.8
Operating margin
5.1
%
3.0
%
4.5
%
2.5
%
Investment income and interest expense
3,066
1,079
(953)
3,975
184.2
(124.0)
Investment income and interest expense, percent of net sales
0.3
%
0.1
%
(0.0)
%
0.2
%
Other income (expense)
(2,618)
(428)
58
(2,270)
(511.7)
102.6
Other income (expense), percent of net sales
(0.2)
%
-
%
-
%
(0.1)
%
Income before provision for income taxes
56,450
26,948
92,535
45,823
109.5
101.9
Income before provision for income taxes, percent of net sales
5.1
%
3.0
%
4.4
%
2.6
%
Provision for income taxes
14,978
6,473
24,374
11,043
131.4
120.7
Effective income tax rate
26.5
%
24.0
%
26.3
%
24.1
%
Net income
$
41,472
$
20,475
$
68,161
$
34,780
102.5
%
96.0
%
Net income, percent of net sales
3.8
%
2.3
%
3.3
%
2.0
%
Basic and diluted earnings per share
$
1.54
$
0.76
$
2.53
$
1.29
102.6
%
96.1
%

~~Net Sales~~

~~Analysis of Sales~~

Percentage Changes
2020 vs. 2019
June 27, 2020
13 Weeks Ended
26 Weeks Ended
Net sales
23.7
%
18.1
%
Net sales, excluding fuel sales
25.8
19.1
Comparable store sales
24.1
18.5
Comparable store sales, excluding fuel sales
26.4
%
19.7
%

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 calculation. The Company only includes retail food stores in the calculation.

‎

Table of Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

~~(continued)~~

Results of Operations ~~(continued)~~

Analysis of Consolidated Statements of Income


														Percentage Changes
	13 Weeks Ended						26 Weeks Ended						13 Weeks Ended			26 Weeks Ended
(amounts in thousands, except per share amounts)	June 26, 2021			June 27, 2020			June 26, 2021			June 27, 2020			2021 vs. 2020			2021 vs. 2020
Net sales	$	1,047,349		$	1,098,704		$	2,053,689		$	2,084,524			(4.7)	%		(1.5)	%
Cost of sales, including advertising, warehousing and distribution expenses		766,157			805,816			1,505,108			1,527,489			(4.9)			(1.5)
Gross profit on sales		281,192			292,888			548,581			557,035			(4.0)			(1.5)
Gross profit margin		26.8	%		26.7	%		26.7	%		26.7	%
Operating, general and administrative expenses		235,633			236,886			471,189			463,605			(0.5)			1.6
O, G & A, percent of net sales		22.5	%		21.6	%		22.9	%		22.2	%
Income from operations		45,559			56,002			77,392			93,430			(18.6)			(17.2)
Operating margin		4.3	%		5.1	%		3.8	%		4.5	%
Investment income (loss) and interest expense		2,140			3,066			3,752			(953)			(30.2)			493.7
Investment income (loss) and interest expense, percent of net sales		0.2	%		0.3	%		0.2	%		(0.0)	%
Other income (expense)		(1,831)			(2,618)			(2,606)			58			(30.1)			(4593.1)
Other income (expense), percent of net sales		(0.2)	%		(0.2)	%		(0.1)	%		0.0	%
Income before provision for income taxes		45,868			56,450			78,538			92,535			(18.7)			(15.1)
Income before provision for income taxes, percent of net sales		4.4	%		5.1	%		3.8	%		4.4	%
Provision for income taxes		12,396			14,978			20,811			24,374			(17.2)			(14.6)
Effective income tax rate		27.0	%		26.5	%		26.5	%		26.3	%
Net income	$	33,472		$	41,472		$	57,727		$	68,161			(19.3)	%		(15.3)	%
Net income, percent of net sales		3.2	%		3.8	%		2.8	%		3.3	%
Basic and diluted earnings per share	$	1.24		$	1.54		$	2.15		$	2.53			(19.5)	%		(15.0)	%

Net Sales ~~(continued)~~

Individual Year-Over-Year Analysis of Sales ~~(continued)~~


	Percentage Changes
	2021 vs. 2020
June 26, 2021	13 Weeks Ended		26 Weeks Ended
Net sales	(4.7)	%		(1.5)	%
Net sales, excluding fuel	(6.7)			(2.7)
Comparable store sales	(5.8)			(2.4)
Comparable store sales, excluding fuel	(7.7)	%		(3.6)	%

According to the latest U.S. Bureau of Labor Statistics’ report, the annual Seasonally Adjusted Food-at-Home Consumer Price Index increased ~~4.3%~~1.6% compared to ~~a decrease~~an increase of ~~0.3%~~4.3% for the same period last year. 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 thirteen-week average price of gasoline in the Central Atlantic States ~~decreased 24.6%~~increased 39.5% or ~~$0.72~~$0.87 per gallon in the ~~second quarter of 2020~~thirteen weeks ended June 26, 2021, compared to the same ~~quarter~~period in ~~2019.~~2020. The ~~year to date~~ average ~~decreased 12.2%~~price of gasoline in the Central Atlantic States increased 20.8% or ~~$0.34~~$0.50 per gallon in the first twenty-six weeks of ~~2020~~2021 when compared to the same period in ~~2019.~~2020.

Table of Contents

WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Comparable store sales for the ~~second quarter of 2020 is positive~~thirteen weeks ended June 26, 2021, compared to the same period ~~a year ago, with increases of 24.1% with~~in 2020 decreased 5.8% including fuel and ~~26.4% without~~7.7% excluding fuel. ~~Year to date,~~In the first twenty-six weeks, comparable store sales for ~~2020~~2021 also remained ~~positive~~negative when compared to the same period in ~~2019,~~2020, with ~~increases~~decreases of ~~18.5%~~2.4% and ~~19.7% with~~3.6% including and ~~without~~excluding fuel, respectively. The ~~Company’s first and second quarter~~Company is experiencing a reduction in sales ~~were favorably impacted~~ as ~~a result of~~compared to the increased sales demand in 2020 related to the novel coronavirus ~~pandemic as well as increasing market share.~~

pandemic.

Although the Company experienced retail inflation and deflation in various commodities for the periods presented, impacts of the ~~recent~~ novel coronavirus pandemic ~~has~~have caused uncertainty about future economic conditions and may change future product mix. 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. ~~Increased~~Decreased sales volume resulted in ~~an increase~~a decrease in cost of sales. Both direct product ~~cost~~costs and distribution ~~cost increase~~costs decrease when sales volume ~~increases.~~

decreases.

Gross profit on sales decreased 4.0% for the ~~second quarter~~thirteen weeks ended June 26, 2021, compared to the same period in 2020. Gross profit margin increased to 26.8% in the thirteen weeks ended June 26, 2021, from 26.7% in the thirteen weeks ended June 27, 2020. In the first twenty-six weeks of ~~2020 remained the same~~2021 gross profit on sales decreased 1.5% when compared to the same period in ~~2019. Year~~2020. The decrease is mainly attributable to ~~date, 2020 gross profit on~~a decrease in sales ~~is positive when~~in 2021 compared to the ~~same period~~higher sales in ~~2019, with an increase~~2020 as a result of ~~0.3%. The increase in gross profit rate is attributable to a change in sales mix along with increased fresh department sell through, which reduced~~ the ~~amount of product loss.~~novel coronavirus pandemic.

Non-cash LIFO inventory valuation adjustments represent expense of ~~$3.3 million~~$865 thousand in the first twenty-six weeks of ~~2020,~~2021 compared to expense of ~~$400 thousand~~$3.3 million in ~~2019.~~the same period in 2020. Although the Company experienced cost inflation and deflation in various commodities for the periods presented, the Company anticipates overall product costs to remain level or increase given the recent ~~novel coronavirus pandemic has caused uncertainty about future economic conditions. Due to this uncertainty, management has estimated a greater annual increase~~inflationary indicators in ~~LIFO expense than it has in previous years due to expected product cost inflation by year end.~~the food retail industry.

‎

~~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)~~

Operating, General and Administrative Expenses

The majority of the operating, general and administrative expenses are driven by sales volume.

Employee-related costs such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately ~~63%~~62.5% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor decreased ~~0.2%~~0.5% in the second ~~quarter~~thirteen weeks of ~~2020~~2021 when compared to the same period in ~~2019,~~2020 and decreased ~~0.5%~~0.2% when comparing the first twenty-six weeks of ~~2020~~2021 with the same period in 2019. Due to the novel coronavirus pandemic, the Company’s hiring rate has increased approximately 300% in response to the increase in demand in stores, as well as distribution needs. The Company also issued a temporary pay increase for essential employees in stores and distribution; hourly store associates are receiving $2 per hour additional wages.

2020.

Depreciation and amortization expense charged to “Operating, general and administrative expenses” was $23.8 million, or 2.3% of net sales during the second thirteen weeks of 2021 compared to $21.7 million, or 2.0% of net sales during the second ~~quarter~~thirteen weeks of ~~2020 compared to $21.4 million, or 2.4% of net sales during the second quarter of 2019.~~2020. During the first twenty-six weeks of ~~2020~~2021 and ~~2019,~~2020, depreciation and amortization expense charged to “Operating, general and administrative expenses” was ~~$43.4~~$47.0 million, or ~~2.1%~~2.3% of net sales and ~~$42.3~~$43.4 million, or ~~2.4%~~2.1% of net sales, respectively. See the Liquidity and Capital Resources section for further information regarding the Company’s capital ~~expansion~~expenditure program.

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WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(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)
June 27, 2020
(Decrease)
as a % of sales
Wages expense
18,232
(0.7)
%
Fixed expense
1,597
(0.8)
Utilities expense
(1,114)
(0.3)

26 Weeks Ended
(dollars in thousands)
Increase
Increase (Decrease)
June 27, 2020
(Decrease)
as a % of sales
Wages expense
$
24,067
(0.7)
%
Utilities expense
(1,370)
(0.2)
Depreciation
1,218
(0.3)

~~Fixed expenses include occupancy costs, depreciation and amortization and insurance expenses. Although fixed expenses have remained stable from a cost perspective,~~A breakdown of the ~~increase in sales has caused~~material increases (decreases) as a ~~decrease in the~~ percent of sales ~~rate.~~in "Operating, general and administrative expenses" is as follows:


	13 Weeks Ended
(amounts in thousands)	Increase		Increase (Decrease)
June 26, 2021	(Decrease)		as a % of sales
Associate benefits, payroll taxes and incentives	$	4,235	0.5	%
Fixed expense		2,051	0.4

	26 Weeks Ended
(amounts in thousands)	Increase		Increase (Decrease)
June 26, 2021	(Decrease)		as a % of sales
Associate health care benefits	$	5,956	0.3	%
Fixed expense		4,255	0.3
Utilities expense		1,214	0.1

The Company has recognized increases in its expenses relating to associate health care benefits due to both an increase in claim volume and cost per claim from 2020 to 2021.

The majority of the operating, general and administrative expenses as a percent of sales presented for the second ~~quarter~~thirteen weeks of 2021 and first twenty-six weeks of ~~2020~~2021 have ~~benefited~~increased in comparison with the ~~2019~~2020 percent of sales due to the ~~increase~~volume driven efficiencies experienced in ~~sales caused by~~2020 as a result of the novel coronavirus pandemic. ~~Due to the nature of fixed~~Fixed expenses ~~management expects less variability when analyzed as a percent of sales, relative to the majority of operating, general~~include occupancy costs, depreciation and ~~administrative~~amortization and insurance expenses.

‎

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~~WEIS MARKETS, INC.~~

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

~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Provision for Income Taxes

The effective income tax rate was ~~26.3%~~26.5% and ~~24.1%~~26.3% for the first twenty-six weeks of ~~2020~~2021 and ~~2019,~~2020, respectively. Historically, the effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes, net of permanent differences.

Liquidity and Capital Resources

The primary source of cash is cash flows generated from operations. In addition, the Company has access to a revolving credit agreement entered into on September 1, 2016, and amended on August 21, 2019, with Wells Fargo Bank, NA (the “Credit Agreement”). The Credit Agreement matures on September 1, 2022, and provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed $30.0 million with an additional discretionary amount available of $70.0 million. As of June ~~27, 2020,~~26, 2021, the availability under the revolving credit agreement was ~~$24.0~~$25.3 million with ~~$6.0~~$4.7 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 has not had an obligation on the Credit Agreement since the second fiscal quarter of 2018.

The Company’s investment portfolio consists of high-grade bonds with maturity dates between one and 10 years and three long-held high yield, large capitalized public company equity securities. The portfolio totaled ~~$97.3~~$115.5 million as of June ~~27, 2020.~~26, 2021. 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 ~~$86~~$135 million in its capital ~~expansion~~expenditure program in 2020. However, management’s ability to complete its current plans will depend upon the governmental jurisdictions in which the Company operates and preventative shut down mandates by such jurisdictions regarding the novel coronavirus pandemic.2021.

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WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

The Company expects that cash generated from operations and cash available under the 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 June ~~27, 2020,~~26, 2021, other than the lease commitments on its store facilities and transportation equipment under operating leases that expire at various dates through ~~2035.~~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. ~~The~~In the second fiscal quarter of 2019, the Company ~~has recently~~ entered into a brokerage agreement with Wells Fargo Securities, LLC to facilitate possible share repurchases.

Quarterly Cash Dividends

At its regular meeting held in July, the Board of Directors unanimously approved a quarterly dividend of $0.31per share, payable on August ~~10, 2020~~9, 2021, to shareholders of record on July ~~27, 2020.~~26, 2021. 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.

‎

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~~WEIS MARKETS, INC.~~

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

~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~(continued)~~

~~Liquidity and Capital Resources (continued)~~

Cash Flow Information


	26 Weeks Ended
(amounts in thousands)	June 26, 2021		June 27, 2020		2021 vs. 2020
Net cash provided by (used in):
Operating activities	$	99,844	$	139,075	$	(39,231)
Investing activities		(78,574)		(80,609)		2,035
Financing activities		(16,677)		(16,677)		—

Operating

26 Weeks Ended
(dollars in thousands)
June 27, 2020
June 29, 2019
2020 vs. 2019
Net cash provided by (used in):
Operating activities
$
139,075
$
77,606
$
61,469
Investing activities
(80,609)
(47,091)
(33,518)
Financing activities
(16,677)
(16,677)
-

~~Operating~~

Cash flows from operating activities ~~increased $61.5~~decreased $39.2 million in the first twenty-six weeks of ~~2020~~2021 compared to the first twenty-six weeks of ~~2019.~~2020. Management attributes this ~~increase~~decrease to ~~increased sales volume resulting from~~cycling the ~~novel coronavirus pandemic. Income taxes payable increased $25.3 million due to increases in taxable income and extended payment timelines for income taxes as a result~~impact of the novel coronavirus ~~pandemic. Sales and profit increased substantially over~~pandemic experienced by the ~~same period last year, while inventory levels have decreased in both the stores and distribution center.~~

~~Investing~~

~~Property and equipment purchases~~Company during the first twenty-six weeks of 2020 ~~totaled $49.7 million compared to $44.3 million~~which, comparably in 2021, produced decreases in accounts receivables, inventories, and accounts payables.

Investing

In the first twenty-six weeks of ~~2019. As~~2021, when compared to the same period in 2020, changes in property and equipment purchases increased $28.1 million and net changes in marketable securities decreased $25.8 million. Additionally, as a percentage of sales, capital expenditures were 3.8% in the first twenty-six weeks of 2021 and 2.4% in the first twenty-six weeks of ~~2020 and 2.5% in~~2020. In 2021, the ~~first twenty-six weeks of 2019. The~~ Company ~~increased its marketable securities portfolio during the first twenty-six weeks of 2020 and~~ plans to maintain or increase ~~the portfolio through the remainder of the year.~~its marketable securities portfolio.

Financing

~~Financing~~

The Company paid dividends of $16.7 million in ~~both~~ the first twenty-six weeks of 2021 and 2020, ~~and the first twenty-six weeks of 2019. The Company has not had an obligation on the Credit Agreement since the second quarter of 2018.~~respectively.

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 ~~2019~~2020 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 ~~28, 2019.~~

‎26, 2020.

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WEIS MARKETS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

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.

~~Employees - Reduced workforces due to the temporary inability to work caused by illness, quarantine, or government mandates.~~

Supply Chain – Interruption in the Company’s supply chain due to having to suspend operations at its centrally located distribution center or vendors not being able to supply the Company because of their own suspended operations.

~~Lawsuits – Future litigation arising from issues concerning the novel coronavirus.~~

~~Future government regulation - Future laws, regulations, interpretations, administrative orders, or applications that may have an adverse impact on the Company’s operations and costs.~~

~~Customer trends – Changes in the methods in which customers procure the Company’s products.~~

~~Cyber security – Increased Cyber-attacks due to “work at home” requirements.~~

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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 June ~~27, 2020.~~26, 2021. 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 ~~28, 2019~~26, 2020, 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 ~~28, 2019~~26, 2020, 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 June ~~27, 2020.~~26, 2021. 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 June ~~27, 2020,~~26, 2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

‎

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WEIS MARKETS, INC.

PART II – OTHER INFORMATION

~~ITEM~~ ~~1a. RISK FACTORS~~

In addition to risks and uncertainties in the ordinary course of business common to all businesses, an important update to the risk factors previously disclosed in Item 1a of Part I of our Annual Report on Form 10-K for the year ended December 28, 2019 is listed below, which could materially impact the Company’s future performance. The risk factor below and the risk factors included in our Annual Report on Form 10-K may be important to understanding statements in this Form 10-Q and should be read in conjunction with the unaudited consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.

Our business and operations, and the operations of our suppliers, have been, and may in the future be adversely affected by epidemics or pandemics such as the novel coronavirus (COVID-19) pandemic outbreak.

We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption. The Company’s business was deemed essential during the novel coronavirus pandemic and the Company is committed to maintaining a safe work and shopping environment. Management, at this time, cannot assess the ultimate economic impact to the Company, which will be determined by, among other things, the length of time that such circumstances continue, nor can the Company predict the effects of governmental and public responses to changing conditions. The risks and uncertainties surrounding the coronavirus pandemic are broad however below is a list of risks management is monitoring which could have a material impact on the Company’s business:

~~Employees - Reduced workforces due to the temporary inability to work caused by illness, quarantine, or government mandates.~~

~~Lawsuits – Future litigation arising from issues concerning the novel coronavirus.~~

~~Future government regulation - Future laws, regulations, interpretations, administrative orders, or applications that may have an adverse impact on the Company’s operations and costs.~~

~~Customer trends – Changes in the methods in which customers procure the Company’s products.~~

~~Cyber security – Increased Cyber-attacks due to “work at home” requirements.~~

‎

~~Table of Contents~~

~~WEIS MARKETS, INC.~~

ITEM 6. EXHIBITS

Exhibits

~~Exhibits~~


	Exhibit 31.1 Rule ~~a-14(a)~~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

‎

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WEIS MARKETS, INC.

SIGNATURES

~~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.
		(Registrant)
	~~(Registrant)~~

Date:	8/5/~~2020~~2021	/S/Jonathan H. Weis
		Jonathan H. Weis
		Chairman,
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	8/5/2021	/S/Michael T. Lockard
		~~(Principal Executive Officer)~~Michael T. Lockard

~~Date:~~	~~8/5/2020~~	~~/S/Scott F. Frost~~
		~~Scott F. Frost~~
		Senior Vice President, Chief Financial Officer
		and Treasurer
		(Principal Financial Officer)


(dollars in thousands)	June 27, 2020		December 28, 2019
Assets
Current:
Cash and cash equivalents	$	108,660	$	66,871
Marketable securities		97,256		63,538
SERP investment		19,230		18,935
Accounts receivable, net		48,541		55,764
Inventories		278,456		279,806
Prepaid expenses and other current assets		26,236		23,378
Total current assets		578,379		508,292
Property and equipment, net		887,285		886,928
Operating lease right-to-use		202,840		210,196
Goodwill		52,330		52,330
Intangible and other assets, net		18,296		17,816
Total assets	$	1,739,130	$	1,675,562

Liabilities
Current:
Accounts payable	$	181,088	$	180,718
Accrued expenses		35,778		39,528
Operating leases		38,048		39,114
Accrued self-insurance		17,282		15,719
Deferred revenue, net		6,244		8,662
Income taxes payable		32,878		8,197
Total current liabilities		311,318		291,938
Postretirement benefit obligations		21,822		22,143
Accrued self-insurance		17,616		17,625
Operating leases		172,970		179,654
Deferred income taxes		96,416		97,041
Other		7,641		8,416
Total liabilities		627,783		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		1,249,657		1,198,173
Accumulated other comprehensive income
(Net of deferred taxes of $1,026 in 2020 and $593 in 2019)		2,598		1,480
		1,262,204		1,209,602
Treasury stock at cost, 6,149,364 shares		(150,857)		(150,857)
Total shareholders’ equity		1,111,347		1,058,745
Total liabilities and shareholders’ equity	$	1,739,130	$	1,675,562



	13 Weeks Ended				26 Weeks Ended
(dollars in thousands, except shares and per share amounts)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Net sales	$	1,098,704	$	887,967	$	2,084,524	$	1,764,686
Cost of sales, including advertising, warehousing and distribution expenses		805,816		651,297		1,527,489		1,298,463
Gross profit on sales		292,888		236,670		557,035		466,223
Operating, general and administrative expenses		236,886		210,373		463,605		422,105
Income from operations		56,002		26,297		93,430		44,118
Investment income (loss) and interest expense		3,066		1,079		(953)		3,975
Other income (expense)		(2,618)		(428)		58		(2,270)
Income before provision for income taxes		56,450		26,948		92,535		45,823
Provision for income taxes		14,978		6,473		24,374		11,043
Net income	$	41,472	$	20,475	$	68,161	$	34,780

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	$	0.62	$	0.62
Basic and diluted earnings per share	$	1.54	$	0.76	$	2.53	$	1.29



						Accumulated
(dollars in thousands, except shares)						Other						Total
For Thirteen Weeks Ended	Common Stock			Retained		Comprehensive		Treasury Stock				Shareholders’
June 27, 2020 and June 29, 2019	Shares	Amount		Earnings		Income (Loss)		Shares		Amount		Equity
Balance at March 28, 2020	33,047,807	$	9,949	$	1,216,524	$	1,569		6,149,364	$	(150,857)	$	1,077,185
Net Income	—		—		41,472		—		—		—		41,472
Other comprehensive income, net of
reclassification adjustments and tax	—		—		—		1,029		—		—		1,029
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at June 27, 2020	33,047,807	$	9,949	$	1,249,657	$	2,598		6,149,364	$	(150,857)	$	1,111,347

Balance at March 30, 2019	33,047,807	$	9,949	$	1,169,510	$	883		6,149,364	$	(150,857)	$	1,029,485
Net income	—		—		20,475		—		—		—		20,475
Other comprehensive income, net of
reclassification adjustments and tax	—		—		—		454		—		—		454
Dividends paid	—		—		(8,339)		—		—		—		(8,339)
Balance at June 29, 2019	33,047,807	$	9,949	$	1,181,647	$	1,337		6,149,364	$	(150,857)	$	1,042,076



			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
June 27, 2020	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	7,188
Level 2
Municipal bonds	$	86,445	$	4,535	$	(912)		90,068
	$	86,445	$	4,535	$	(912)	$	97,256



Analysis of Consolidated Statements of Income
													Percentage Changes
	13 Weeks Ended						26 Weeks Ended						2020 vs. 2019			2020 vs. 2019
(dollars in thousands except per share amounts)	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019			13 Weeks Ended			26 Weeks Ended
Net sales	$	1,098,704		$	887,967		$	2,084,524		$	1,764,686			23.7	%		18.1	%
Cost of sales, including advertising, warehousing and distribution expenses		805,816			651,297			1,527,489			1,298,463			23.7			17.6
Gross profit on sales		292,888			236,670			557,035			466,223			23.8			19.5
Gross profit margin		26.7	%		26.7	%		26.7	%		26.4	%
Operating, general and administrative expenses		236,886			210,373			463,605			422,105			12.6			9.8
O, G & A, percent of net sales		21.6	%		23.7	%		22.2	%		23.9	%
Income from operations		56,002			26,297			93,430			44,118			113.0			111.8
Operating margin		5.1	%		3.0	%		4.5	%		2.5	%
Investment income and interest expense		3,066			1,079			(953)			3,975			184.2			(124.0)
Investment income and interest expense, percent of net sales		0.3	%		0.1	%		(0.0)	%		0.2	%
Other income (expense)		(2,618)			(428)			58			(2,270)			(511.7)			102.6
Other income (expense), percent of net sales		(0.2)	%		-	%		-	%		(0.1)	%
Income before provision for income taxes		56,450			26,948			92,535			45,823			109.5			101.9
Income before provision for income taxes, percent of net sales		5.1	%		3.0	%		4.4	%		2.6	%
Provision for income taxes		14,978			6,473			24,374			11,043			131.4			120.7
Effective income tax rate		26.5	%		24.0	%		26.3	%		24.1	%
Net income	$	41,472		$	20,475		$	68,161		$	34,780			102.5	%		96.0	%
Net income, percent of net sales		3.8	%		2.3	%		3.3	%		2.0	%
Basic and diluted earnings per share	$	1.54		$	0.76		$	2.53		$	1.29			102.6	%		96.1	%


	26 Weeks Ended
(dollars in thousands)	Increase		Increase (Decrease)
June 27, 2020	(Decrease)		as a % of sales
Wages expense	$	24,067	(0.7)	%
Utilities expense		(1,370)	(0.2)
Depreciation		1,218	(0.3)