FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 26, 1994
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 (I.R.S. Employer
incorporation or organization) Identification No.)
1000 S. Second Street
P. O. Box 471
Sunbury, PA 17801-471
(Address of principal executive offices) (Zip Code)
(717) 286-4571
(Registrant's telephone number, including area code)
NONE
(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 43,746,911 shares
(Outstanding at end of period)
WEIS MARKETS, INC.
INDEX
Page No.
Part I - Financial Information
Consolidated Condensed Balance Sheets -
March 26, 1994 and December 25, 1993 2
Consolidated Condensed Statements of Income
Three Months Ended March 26, 1994
and March 25, 1993 3
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 26, 1994
and March 25, 1993 4
Notes to Consolidated Condensed Financial Statements 5
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income 6
Part II - Other Information 7
Other Information and Signatures 8
1
PART I - FINANCIAL INFORMATION
WEIS MARKETS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
March 26, 1994 December 25, 1993
(Unaudited) (Unaudited)
Assets
Current Assets:
Cash $ 3,200 $ 9,066
Marketable Securities 477,300 458,112
Accounts Receivable, Net 22,526 20,378
Inventories 118,158 111,847
Prepaid Expenses and Other Assets 5,376 6,380
Total Current Assets 626,560 605,783
Property and Equipment, Net 224,918 225,285
Intangible Assets, Net 13,489 13,422
Total Assets $ 864,967 $ 844,490
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $ 66,168 $ 59,356
Accrued Expenses 7,453 6,900
Accrued Self-Insurance 8,576 7,886
Payable to Employee Benefit Plans 8,478 8,994
Income Taxes 6,529 1,938
Deferred Income Taxes 7,146 7,525
Total Current Liabilities 104,350 92,599
Deferred Income Taxes 14,342 13,776
Minority Interest (3) 0
Shareholders' Equity
Common Stock 7,259 7,255
Retained Earnings 800,597 791,072
Net Unrealized Gain on Mar. Sec. 16,740 16,740
Minimum Pension Liability (125) (125)
824,471 814,942
Less Treasury Stock, At Cost (78,193) (76,827)
Total Shareholders' Equity 746,278 738,115
Total Liabilities and
Shareholders' Equity $ 864,967 $ 844,490
<FN>
See accompanying notes to consolidated condensed financial statements.
2
WEIS MARKETS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)
Three Months Ended
03/26/94 03/27/93
Net Sales $ 372,626 $ 356,579
Cost of Sales 279,840 267,295
Gross Profit 92,786 89,284
Operating, General and
Administrative expenses 74,835 69,349
17,951 19,935
Interest and Dividend Income 5,402 5,324
Other Income 3,739 3,691
Minority Interest 3 0
Income before provision
for income taxes 27,095 28,950
Provision for income taxes 9,697 10,263
Net Income $ 17,398 $ 18,687
Weighted average number of common
shares outstanding 43,768,365 43,831,904
Cash dividends per common share $ 0.18 $ 0.17
Earnings per common share negligible
difference if full dilution is assumed (a$ 0.40 $ 0.43
<FN>
(a) Primary earnings per common share have been computed by dividing
net income by the weighted average number of shares outstanding during
this period. Earnings per common share assuming full dilution have been
determined on the assumption that stock options outstanding at end of
period and exercised during the period were exercised as of the beginning
of the period. The increase in the average shares outstanding during the
period resulting from the above assumptions was reduced by the number of
common shares which were assumed to have been purchased from the
assumed proceeds resulting from the exercise of options; these purchases
were assumed to have been made at average market prices for the
options outstanding at the end of period.
See accompanying notes to consolidated condensed financial statements.
3
WEIS MARKETS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
Three Months Ended
3/26/94 3/27/93
Cash flows from operating activities:
Net Income $ 17,398 $ 18,687
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 7,631 7,497
(Gain) on disposition of fixed assets (10) (844)
Changes in operating assets and liabilities:
(Increase) in inventories (6,311) (8,108)
(Increase)/Decrease in accounts receivable,
prepaid expenses and other assets (1,144) 1,641
Decrease in prepaid income taxes 0 419
Increase in accounts payable,
accrued expenses, and payable to employee
benefit plans 7,536 16,296
Increase in income taxes payable 4,591 4,967
Increase in deferred taxes 187 267
Net cash provided by operating
activities 29,878 40,822
Cash flows from investing activities:
Purchase of property and equipment (6,924) (21,181)
Increase in intangible assets (416) (7,177)
Proceeds from the sale of property and equipment 19 1,156
Increase in marketable securities (19,188) (6,923)
Net cash used by investing activities (26,509) (34,125)
Cash flows from financing activities:
Proceeds from issuance of common stock 4 9
Dividends paid (7,873) (7,450)
Purchase of treasury stock (1,366) 0
Net cash used by financing activiti(9,235) (7,441)
Net increase (decrease) in cash (5,866) (744)
Cash at beginning of period 9,066 1,298
Cash at end of period $ 3,200 $ 554
<FN>
See accompanying notes to consolidated condensed financial statements.
4
WEIS MARKETS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly the
financial position as of March 26, 1994 and the results of operations for th
three months then ended, and statements of cash flows for the three months
then ended.
2. The comparative balance sheet for December 25, 1993 was derived
from the audited financial reports for that year ended. This information has
been designated as "unaudited" in its entirety as the year-end column is
not covered by an auditors report, as contemplated by SAS 42, in this 10-Q
filing.
3. The results of operations for the three month ended periods March 26,
1994 and March 25, 1993 are not necessarily indicative of the results to be
expected for the full year.
5
WEIS MARKETS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
Sales for the first quarter ended March 26, 1994, increased 4.5% to
$372,626,000 compared with $356,579,000 in the same quarter last year,
while same-store sales increased 3.7%. The company continues to feel
the impact of competitive pressures, the struggling economy, and the lack
of inflation in food costs. Management does not expect the competitive
situation to change or the economy in its market area to drastically improve
in the near future, but the cost of merchandise in selected food categories is
expected to rise as interest rates rise.
Gross profit of $92,786,000 at 24.9% of sales, increased $3,502,000 or
3.9% versus the same quarter last year. The increased gross profit dollars
were generated from the increased sales volume, as the gross profit rate
declined .1% compared to last year.
Operating expenses for the first quarter of $74,835,000 at 20.1% of
sales, increased $5,486,000, or 7.9% higher than the first quarter of 1993.
Expenses associated with the self- insured medical plans increased
$712,000 while workers compensation expense declined $119,000. A
portion of the reduction in the workers compensation expense can be
attributed to a change in the Pennsylvania minimum compensation
requirements. Employee retirement benefit costs increased $302,000 and
advertising expenditures are up $677,000 versus last year. In its efforts to
conform with the new labeling standards as set forth in the Nutritional
Labeling and Educational Act, the company expensed $122,000 of its own
private brand labels during the quarter. The severe winter weather during
the quarter significantly impacted expenses in all areas of the operation.
Snow removal costs alone increased $513,000 versus the same quarter
last year.
Interest and dividend income earned in the first quarter of $5,402,000
at 1.5% of sales, increased $78,000, or 1.5%, versus last year and was even
with last year as a percent of sales. Interest rates have recently begun to
increase but there will not be an immediate impact to the earnings of the
company.
Other income for the quarter of $3,739,000 at 1.0% of sales increased
$48,000, or 1.3%, and was even with last year as a percent of sales. Other
income in the 1st quarter of 1993 included a gain on the sale of an
abandoned store facility of $830,000.
At the beginning of the current year, the company acquired an 80%
interest in SuperPetz a new chain of large pet supply stores operating in
Ohio. Minority interest of $3,000 represents 20% of the SuperPetz, Inc.
loss for the quarter. A fourth store is expected to open in May of this year
and other sites are actively being sought.
The effective tax rate for the first quarter was 35.8% compared to
35.5% for the same quarter in 1993.
Net earnings for the first quarter were $17,398,000, or 40 cents per
share, compared with $18,687,000, or 43 cents per share, in 1993.
The company opened one new store and completed one major
remodel of an existing store during the quarter. Construction is now in
progress on three new stores with seven remodels and expansions in
various stages of completion. A 184,000 square foot addition to the Milton
Distribution Center was completed and became fully operation in February
of this year. This additional space is used by a new wholly owned
subsidiary of Weis Markets, Shamrock Wholesale Distributing Company,
which was developed to buy, sell, and distribute nonfoods, health and
beauty care, and other associated product lines. At the end of March, Weis
Markets, Inc., had 142 stores in operation in Pennsylvania, New Jersey,
New York, Maryland, Virginia and West Virginia, three SuperPetz pet
supply stores in Ohio and Weis Food Service, a restaurant and institutional
food supplier.
6
WEIS MARKETS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
LIQUIDITY AND CAPITAL RESOURCES
The corporation's funding requirements during the 13-week period
ended March 26, 1994 and during the comparable period in 1993, were for
acquisitions, the enlargement and remodeling of existing supermarkets and
upgrading of the processing and distribution facilities. Property,
equipment and acquisition expenditures in the first quarter of 1994
amounted to $7,340,000, compared to $28,358,000 in 1993.
The purchase of Treasury Stock during the first quarter totaled
$1,366,000. The Board of Directors 1991 resolution authorizing the
purchase of Treasury Stock, has a remaining balance of 646,000 shares.
Cash dividends were paid during the quarter to holders of common stock at
a rate of 18 cents per share. The Board of Directors recently declared a
normal quarterly dividend of 18 cents a share to holders of record on May
13, 1994, payable May 27, 1994.
The company's capital requirements through the first quarter of 1994
were financed entirely from internally generated funds. The working
capital has increased 1.8% since the beginning of the year. Management
believes that the company's cash and short-term investments, plus cash
flow from operations, will be sufficient to finance current operations, cover
dividend requirements, self-insurance programs, possible acquisitions, the
purchase of Treasury Stock, and the continuing expansion program.
Management continues to review grocery store and food service
acquisition possibilities within its market area and other types of business
relationships. Selected acquisition firms are aware of the company's
expansion plans and are working with management in this regard.
The corporation has no other commitment of capital resources as of
the end of the first quarter, March 26, 1994.
7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K -- There were no reports on Form 8-K filed for the
three months ended March 26, 1994
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.
Date 5/12/94
SIGFRIED WEIS
President
Date 5/12/94
WILLIAM R. MILLS
Vice President-Finance
8