UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
(Mark One)
| [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934 |
| For the quarterly period ended September 27, 2003 | |
| 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 |
WEIS MARKETS, INC.
(Exact name of registrant as specified in its charter)
| 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 Sunbury, Pennsylvania (Address of principal executive offices) | 17801-0471 (Zip Code) |
Registrant's telephone number, including area code: (570) 286-4571 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common Stock, No Par Value 27,192,777 shares
(Outstanding at end of period)
WEIS MARKETS, INC.
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION |
| WEIS MARKETS, INC. |
| CONSOLIDATED BALANCE SHEETS |
| (unaudited) |
| (dollars in thousands) |
| September 27, 2003 | December 28, 2002 | |||||
| Assets | ||||||
| Current: | ||||||
| Cash | $ | 3,525 | $ | 3,929 | ||
| Marketable securities | 97,881 | 43,510 | ||||
| Accounts receivable, net | 32,657 | 30,188 | ||||
| Inventories | 167,209 | 182,832 | ||||
| Prepaid expenses | 4,568 | 3,980 | ||||
| Deferred income taxes | 3,591 | --- | ||||
| Total current assets | 309,431 | 264,439 | ||||
| Property and equipment, net | 414,393 | 428,153 | ||||
| Intangible and other assets | 23,388 | 24,107 | ||||
| $ | 747,212 | $ | 716,699 | |||
| Liabilities | ||||||
| Current: | ||||||
| Accounts payable | $ | 99,727 | $ | 101,917 | ||
| Accrued expenses | 20,173 | 15,704 | ||||
| Accrued self-insurance | 17,641 | 16,117 | ||||
| Payable to employee benefit plans | 9,325 | 8,950 | ||||
| Income taxes payable | 6,755 | 6,112 | ||||
| Deferred income taxes | --- | 702 | ||||
| Total current liabilities | 153,621 | 149,502 | ||||
| Deferred income taxes | 23,305 | 14,765 | ||||
| Shareholders' Equity | ||||||
| Common stock, no par value, 100,800,000 shares authorized, | ||||||
| 32,986,937 and 32,986,337 shares issued, respectively | 7,899 | 7,882 | ||||
| Retained earnings | 696,422 | 678,294 | ||||
| Accumulated other comprehensive income | ||||||
| (Net of deferred taxes of $2,765 in 2003 and $2,939 in 2002) | 3,899 | 4,145 | ||||
| 708,220 | 690,321 | |||||
| Treasury stock at cost, 5,794,160 and 5,792,800 shares, respectively | (137,934 | ) | (137,889 | ) | ||
| Total shareholders' equity | 570,286 | 552,432 | ||||
| $ | 747,212 | $ | 716,699 | |||
| See accompanying notes to consolidated financial statements. | ||||||
Page 1 of 11 (Form 10-Q)
| WEIS MARKETS, INC. |
| CONSOLIDATED STATEMENTS OF INCOME |
| (unaudited) |
| (dollars in thousands except per share amounts) |
| Three Months Ended | Nine Months Ended | |||||||||
| Sept. 27, 2003 | Sept. 28, 2002 | Sept. 27, 2003 | Sept. 28, 2002 | |||||||
| Net sales | $ | 504,690 | $ | 495,891 | $ | 1,521,742 | $ | 1,492,179 | ||
| Cost of sales, including warehousing and distribution expenses | 371,299 | 363,820 | 1,120,776 | 1,096,707 | ||||||
| Gross profit on sales | 133,391 | 132,071 | 400,966 | 395,472 | ||||||
| Operating, general and administrative expenses | 120,180 | 114,625 | 349,162 | 339,132 | ||||||
| Income from operations | 13,211 | 17,446 | 51,804 | 56,340 | ||||||
| Investment income | 303 | 211 | 919 | 661 | ||||||
| Other income | 4,421 | 6,175 | 13,090 | 12,221 | ||||||
| Interest expense | (94 | ) | (55 | ) | (282 | ) | (319 | ) | ||
| Income before provision for income taxes | 17,841 | 23,777 | 65,531 | 68,903 | ||||||
| Provision for income taxes | 6,977 | 8,931 | 25,105 | 25,727 | ||||||
| Net income | $ | 10,864 | $ | 14,846 | $ | 40,426 | $ | 43,176 | ||
| Weighted-average shares outstanding | 27,193,094 | 27,204,263 | 27,193,392 | 27,203,873 | ||||||
| Cash dividends per share | $ | 0.28 | $ | 0.27 | $ | 0.82 | $ | 0.81 | ||
| Basic and diluted earnings per share | $ | 0.40 | $ | 0.55 | $ | 1.49 | $ | 1.59 | ||
| See accompanying notes to consolidated financial statements. | ||||||||||
| WEIS MARKETS, INC. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (unaudited) |
| (dollars in thousands) |
| Nine Months Ended | |||||
| Sept. 27, 2003 | Sept. 28, 2002 | ||||
| Cash flows from operating activities: | |||||
| Net income | $ | 40,426 | $ | 43,176 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation | 29,791 | 30,924 | |||
| Amortization | 4,688 | 4,007 | |||
| Loss on sale of fixed assets | (92 | ) | (2,548 | ) | |
| Changes in operating assets and liabilities: | |||||
| Inventories | 15,623 | 6,950 | |||
| Accounts receivable and prepaid expenses | (3,057 | ) | (1,001 | ) | |
| Income taxes recoverable | --- | 3,395 | |||
| Accounts payable and other liabilities | 4,178 | 4,670 | |||
| Income taxes payable | 643 | 2,168 | |||
| Deferred income taxes | 4,421 | (3,475 | ) | ||
| Net cash provided by operating activities | 96,621 | 88,266 | |||
| Cash flows from investing activities: | |||||
| Purchase of property and equipment | (24,273 | ) | (28,550 | ) | |
| Proceeds from the sale of property and equipment | 4,173 | 9,778 | |||
| Purchase of marketable securities | (55,788 | ) | (21,754 | ) | |
| Proceeds from maturities of marketable securities | 997 | 15 | |||
| (Increase) decrease in intangible and other assets | 192 | (300 | ) | ||
| Net cash used in investing activities | (74,699 | ) | (40,811 | ) | |
| Cash flows from financing activities: | |||||
| Payments of long-term debt, net | --- | (25,000 | ) | ||
| Proceeds from issuance of common stock | 17 | 26 | |||
| Dividends paid | (22,298 | ) | (22,035 | ) | |
| Purchase of treasury stock | (45 | ) | (49 | ) | |
| Net cash used in financing activities | (22,326 | ) | (47,058 | ) | |
| Net increase (decrease) in cash | (404 | ) | 397 | ||
| Cash at beginning of period | 3,929 | ��3,255 | |||
| Cash at end of period | $ | 3,525 | $ | 3,652 | |
| See accompanying notes to consolidated financial statements. |
Page 3 of 11 (Form 10-Q)
WEIS MARKETS, INC.
NOTES TO 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 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. For further information, refer to the consolidated financial statements and footnotes thereto included in the company's latest annual report on Form 10-K.
Impact of Recently Issued Accounting Standards: As of December 28, 2002, the company adopted Emerging Issues Task Force Issue No. 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" (EITF Issue). This EITF Issue establishes new rules for accounting for certain cash considerations received by a reseller from a vendor; however, the adoption of this EITF Issue did not have an impact on the company's financial statement classifications, net income or shareholders' equity.
On December 31, 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" (Statement No. 148). Statement 148 amends Statement of Financial Accounting Standards Statement No. 123, "Accounting for Stock-Based Compensation" (Statement No. 123), to provide alternative methods of transition to Statement No. 123's fair value method of accounting for stock-based employee compensation. Statement No. 148 also amends the disclosure provisions of Statement No. 123 and Accounting Principles Board's Opinion No. 28, "Interim Financial Reporting" (APB 28), to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. While Statement No. 148 does not amend Statement No. 123 to require companies to account for employee stock options using the fair value method, the disclosure provisions of Statement No. 148 are applicable to all companies with stock-based employee compensation, regardless of whether they account for that compensation using the fair value method of Statement No. 123 or the intrinsic value method of the Accounting Principles Board's Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25).
As of September 27, 2003, the company has a stock option plan, which is set forth in Note 7(a) of the company's 10-K under the caption "Incentive Plans," within the "Notes to Consolidated Financial Statements," which was filed for the fiscal year ended December 28, 2002. The company accounts for the plan under the recognition and measurement principles of APB 25 and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under this plan have an exercise price equal to the market value of the underlying common stock on the date of grant. The effects on net income and earnings per share if the company had applied the fair value recognition provisions of Statement No. 123 are immaterial.
Page 4 of 11 (Form 10-Q)
WEIS MARKETS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(2) Comprehensive Income
The components of comprehensive income, net of related tax, for the period ended September 27, 2003 and September 28, 2002 are as follows:
| Three Months Ended | Nine Months Ended | ||||||||
| (dollars in thousands) | 2003 | 2002 | 2003 | 2002 | |||||
| Net income | $ | 10,864 | $ | 14,846 | $ | 40,426 | $ | 43,176 | |
| Unrealized losses on marketable securities | (414 | ) | (1,935 | ) | (246 | ) | (3,541 | ) | |
| Comprehensive income | $ | 10,450 | $ | 12,911 | $ | 40,180 | $ | 39,635 | |
(3) Property and Equipment
Property and equipment, as of September 27, 2003 and December 28, 2002, consisted of :
| (dollars in thousands) | Useful Life (in years) | 2003 | 2002 | |||
| Land | $ | 63,763 | $ | 64,209 | ||
| Buildings and improvements | 10-60 | 335,788 | 335,224 | |||
| Equipment | 3-12 | 489,558 | 478,570 | |||
| Leasehold improvements | 5-20 | 99,771 | 99,690 | |||
| Total, at cost | 988,880 | 977,693 | ||||
| Less accumulated depreciation and amortization | 574,487 | 549,540 | ||||
| $ | 414,393 | $ | 428,153 |
Page 5 of 11 (Form 10-Q)
WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
Total sales for the third quarter ended September 27, 2003 increased 1.8% to $504.7 million compared to sales of $495.9 million in the same quarter of 2002. Year to date sales of $1.5 billion increased $29.6 million or 2.0% compared with the same three quarters in 2002. Comparable store sales in the third quarter increased 2.4% compared to a 0.6% increase in 2002. Year to date the company generated a 2.6% increase in comparable store sales compared to a 1.5% increase for the same period a year ago.
When calculating the percentage change in comparable store sales, the company defines a new store as comparable the week following one full year of operation. Relocated stores and stores with expanded square footage are included in comparable sales since these units are located in existing markets. When a store is closed, sales generated from that unit in the prior year are subtracted from total company sales starting the same week of closure in the prior year and continuing from that point forward.
The sales increase in the current quarter was partially the result of aggressive advertising and promotional activity in key markets. Although sales results are affected by product cost inflation and deflation, management does not feel they can accurately measure the full effect on retail pricing because of changes in the types of merchandise sold between periods, shifts in shoppers' buying patterns and the fluctuation in competitive influences. During the third quarter, the company experienced significant cost increases for certain commodities such as beef, poultry and dairy (eggs and milk). These cost increases combined with competitive activity that restrained management from increasing retails, caused some unexpected erosion in gross profit in these commodities. At this time, management is unaware of any events or trends that may cause a material change to the overall financial operation due to the upward shift in product cost.
Gross profit of $133.4 million at 26.4% of sales, increased $1.3 million or 1.0% versus the same quarter last year, but the gross profit rate decreased 0.2%. The year to date gross profit at 26.3% of sales increased $5.5 million or 1.4%, while the gross profit rate decreased 0.2%. The company experienced an increase in inventory losses this year, which negatively impacted the gross profit rate by 0.2% when compared with the same period last year. To address this issue, management established a "Shrink Reduction Team" late in the second quarter of this year, devoted to the reduction of inventory loss. Mangement expects to reverse this loss trend over the next several months.
The third quarter operating, general and administrative expenses of $120.2 million at 23.8% of sales, increased $5.6 million or 4.8% compared to the same quarter in 2002. As a percentage of sales, operating expenses in the quarter were 0.7% higher than the 23.1% rate realized in the third quarter last year. Year to date operating, general and administrative expenses increased $10.0 million over expenses in the same three quarters of last year. As a percentage of sales, year to date expenses increased from 22.7% in 2002 to 22.9% in the current year.
Store supplies to support the advertising and promotional programs along with media advertising expense net of the vendor paid cooperative advertising credits, increased $3.1 million for the quarter compared to the third quarter in 2002. Year to date, the company experienced a $2.8 million increase in electronic fund transfer fees, and custodial, security and snow removal services. Management remains committed to improving efficiencies and controlling expenses at store and distribution levels, while continuing to drive profitable, top line sales growth.
In the third quarter, the company's investment income totaled $303,000 at 0.1% of sales, an increase of $92,000 or 43.6% compared to the same period a year ago. Year to date, the company's investment income increased $258,000 or 39.0% to $919,000.
Other income of $4.4 million at 0.9% of sales decreased $1.8 million or 28.4% compared to the same quarter last year. The company's other income is primarily generated from net rental income, coupon-handling fees, store service commissions, cardboard salvage and gain or loss on the sale of fixed assets. In the third quarter of 2002, the company sold two closed store facilities realizing a gain of $2.9 million. Year to date other income of $13.1 million at 0.9% of sales increased $869,000 or 7.1% versus a year ago.
Page 6 of 11 (Form 10-Q)
WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
OPERATING RESULTS (continued)
Interest expense for 2003 is comprised of the loan commitment fee on the three-year unsecured Revolving Credit Agreement established in October of 2002 for $100 million and the amortization of expenses associated with establishing that credit facility.
The effective tax rate for the third quarter of 2003 was 39.1% compared with 37.6% in 2002. Year to date, the effective tax rate of 38.3% compares to 37.3% in the same period last year. The company's federal income tax returns for 1997 through 1999 have undergone a routine audit by the Internal Revenue Service (IRS). The IRS provided the company with a number of notices of proposed adjustment. The company and the IRS agreed to enter into an accelerated negotiated settlement process for certain of these adjustments. If the IRS issues a notice of deficiency, the amount may be material to the overall financial position of the company. The company believes that it has meritorious defenses and would vigorously contest these matters.
For the three-month period ending September 27, 2003, net income of $10.9 million decreased 26.8% compared to the same period last year. Basic and diluted earnings per share of $.40 for the quarter decreased $.15 or 27.3% compared to 2002. Year to date earnings decreased 6.4% from $43.2 million to $40.4 million. Basic and diluted earnings per share for the first three quarters of 2003 decreased 6.3% to $1.49 compared to $1.59 generated in the same period last year.
As of September 27, 2003, Weis Markets, Inc. operated 159 retail food stores and 33 SuperPetz pet supply stores. The company currently operates supermarkets in Pennsylvania, Maryland, New Jersey, New York, Virginia and West Virginia. SuperPetz operates stores in Alabama, Georgia, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, South Carolina and Tennessee.
LIQUIDITY AND CAPITAL RESOURCES
During the first three quarters of 2003, the company generated $96.6 million in cash flows from operating activities compared to $88.3 million for the same period in 2002. Working capital increased $40.9 million or 35.6% since the beginning of the year.
Net cash used in investing activities in the first three quarters of 2003 amounted to $74.7 million compared to the $40.8 million used in 2002. Capital expenditures for the three quarters of the year totaled $24.3 million compared to $28.6 million in 2002. Earlier this year, the company estimated that its 2003 capital expenditure plans would require an investment of $72.4 million. This plan includes 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 company processing and distribution facilities. Capital projects are running behind initial completion dates, and the company does not anticipate spending the entire capital budget amount in the current year. The company anticipates funding its working capital requirements for the remainder of the year, including its capital expenditure requirements, through internally generated cash flows from operations and without external financing.
Net cash used in financing activities during the first three quarters of 2003 was $22.3 million compared to $47.1 million in 2002. The Board of Directors' 1996 resolution authorizing the purchase of 1,000,000 shares of treasury stock has a remaining balance of 545,347 shares. Year to date cash dividends paid to shareholders of $22.3 million compared with $22.0 million during the first three quarters of 2002. At a regular meeting of the Board of Directors held in October, the Directors unanimously approved a regular quarterly dividend of $.28 per share. The dividend is payable on November 17, 2003 to shareholders of record on November 3, 2003.
Page 7 of 11 (Form 10-Q)
WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Critical Accounting Policies
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.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that the company makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The company evaluates these estimates and assumptions on an ongoing basis and may retain outside consultants, lawyers and actuaries to assist in its evaluation. The company believes the following accounting policies are the most critical because they involve the most significant judgments and estimates used in preparation of its consolidated financial statements.
Vendor Allowances
Vendor rebates, credits and promotional allowances that relate to the company's buying and merchandising activities, including lump-sum payments associated with long-term contracts, are recorded as a component of cost of sales as they are earned, in accordance with its underlying agreement. Off invoice and bill back allowances are used to reduce direct product costs upon the receipt of goods. Volume incentive discounts are realized as a reduction of cost of sales at the time it is deemed probable and reasonably estimable that the incentive target will be reached. Promotional allowance funds for specific vendor sponsored programs are recognized as a reduction of cost of sales as the program occurs and the funds are earned per the agreement. Cash discounts for prompt payment of invoices are realized in cost of sales as invoices are paid. Warehouse and back haul allowances provided by suppliers for distributing their product through our distribution system are recorded in cost of sales as the required performance is completed. Warehouse rack and slotting allowances are recorded in cost of sales when new items are initially setup in the company's distribution system, which is when the related expenses are incurred and performance under the agreement is complete. Swell allowances for damaged goods are realized in cost of sales as provided by the supplier, helping to offset product shrink losses also recorded in cost of sales.
Vendor allowances recorded as credits in cost of sales for the third quarter totaled $10.1 million in 2003 and $9.9 million in 2002. Year-to-date vendor allowances for 2003 and 2002 were $34.2 million and $33.7 million, respectively. Vendor paid cooperative advertising credits for the third quarter totaled $2.7 million in 2003 and $3.6 million in 2002. These credits were netted against advertising expenses for the third quarter of $7.1 million in 2003 and $5.6 million in 2002, within operating, general and administrative expenses. Year-to-date cooperative advertising credits for 2003 and 2002 were $11.6 million and $12.0 million, respectively, while year-to-date advertising expenses were $19.0 million for 2003 and $17.1 million for 2002. At the end of third quarter 2003, the company had accounts receivable due from vendors of $3.3 million for earned advertising credits and $4.3 million for earned promotional discounts. The company had $2.3 million in unearned revenue included in accrued liabilities for unearned vendor programs under long-term contracts for display and shelf space allocation. The company does not use estimates to account for receivables due under these vendor arrangements.
Page 8 of 11 (Form 10-Q)
WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Critical Accounting Policies (continued)
Accrued Store Closing Costs
The company provides for closed store liabilities relating to the estimated post-closing lease liabilities and related other exit costs associated with the store closing commitments. The closed store liabilities are usually paid over the lease terms associated with the closed stores having remaining terms ranging from one to eight years. At September 27, 2003, closed store lease liabilities totaled $2.7 million. The company estimates the lease liabilities, net of sublease income, using the undiscounted rent payments of closed stores. Other exit costs include estimated real estate taxes, common area maintenance, insurance and utility costs to be incurred after the store closes over the remaining lease term. Store closings are generally completed within one year after the decision to close. Adjustments to closed store liabilities and other exit costs primarily relate to changes in subtenants and actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the change becomes known. Any excess store closing liability remaining upon settlement of the obligation is reversed to income in the period that such settlement is determined. Inventory write-downs, if any, in connection with store closings, are classified in cost of sales. Costs to transfer inventory and equipment from closed stores are expensed as incurred. Store closing liabilities are reviewed quarterly to ensure that any accrued amount that is no longer needed for its originally intended purpose is reversed to income in the proper period.
Self-Insurance
The company is self-insured for a majority of its workers' compensation, general liability, vehicle accident and associate medical benefit claims. The self-insurance liability for most of the workers' compensation is determined based on historical data and an estimate of claims incurred but not reported. The other self-insurance liabilities are determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The company is liable for associate health claims up to a lifetime aggregate of $1,000,000 per member and for workers' compensation claims up to $1,000,000 per claim. Property and casualty insurance coverage is maintained with outside carriers at deductible or retention levels ranging from $100,000 to $500,000. Significant assumptions used in the development of the actuarial estimates include reliance on our historical claims data including average monthly claims and average lag time between incurrence and payment.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this 10-Q Report may contain forward-looking statements. 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 the retail industry; the regulatory environment; rapidly changing technology and competitive factors, including increased competition with regional and national retailers; and price pressures. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect 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.
Page 9 of 11 (Form 10-Q)
WEIS MARKETS, INC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative Disclosure - There have been no material changes in the company's market risk during the nine months ended September 27, 2003. Quantitative information is set forth in Item 7a on the company's Form 10-K under the caption "Quantitative Disclosures About Market Risk," which was filed for the fiscal year ended December 28, 2002 and is incorporated herein by reference.
Qualitative Disclosure - This information is set forth in Item 7a of the company's 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, 2002 and is incorporated herein by reference.
ITEM 4. CONTROLS AND PROCEDURES
The Chief Executive Officer and the Chief Financial Officer of the company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Report, that the company's disclosure controls and procedures are effective 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, is 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 is 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.
There were no significant changes in the company's internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation.
Page 10 of 11 (Form 10-Q)
WEIS MARKETS, INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
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
(b) Reports on Form 8-K - One Form 8-K, Item 9, was filed on July 16, 2003, to announce the second quarter results of the company.
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) | |||
| Date 11/06/2003 | /S/Norman S. Rich | ||
| Norman S. Rich | |||
| President / Chief Executive Officer | |||
| Date 11/06/2003 | /S/William R. Mills | ||
| William R. Mills | |||
| Senior Vice President and Treasurer / | |||
| Chief Financial Officer / Chief Accounting Officer | |||
Page 11 of 11 (Form 10-Q)
WEIS MARKETS, INC.
I, Norman S. Rich, President/CEO of Weis Markets, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Weis Markets, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the periods covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit committee of registrant's board
of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
Date: November 6, 2003 /S/ Norman S. Rich
Norman S. Rich
President/CEO
WEIS MARKETS, INC.
I, William R. Mills, Senior Vice President and Treasurer/CFO of Weis Markets Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Weis Markets Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the periods covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit committee of registrant's board
of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
Date: November 6, 2003 /S/ William R. Mills
William R. Mills
Senior Vice President
and Treasurer/CFO
WEIS MARKETS, INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the 10-Q Report of Weis Markets, Inc. (the "company") on Form 10-Q for the quarter ending September 27, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), We, Norman S. Rich, President / Chief Executive Officer, and William R. Mills, Senior Vice President and Treasurer / Chief Financial Officer, of the company, certify, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.
/S/ Norman S. Rich
Norman S. Rich
President / CEO
11/06/2003
/S/ William R. Mills
William R. Mills
Senior Vice President and Treasurer / CFO
11/06/2003
A signed original of this written statement required by Section 906 has been provided to Weis Markets, Inc. and will be retained by Weis Markets, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.