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 April 1, 1995
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 43,172,459 shares
(Outstanding at end of period)
WEIS MARKETS, INC.
INDEX
Page No.
Part I - Financial Information
Consolidated Condensed Balance Sheets -
April 1,1995 and December 31, 1994 2
Consolidated Condensed Statements of Income
Three Months Ended April 1,1995
and March 26, 1994 3
Consolidated Condensed Statements of Cash Flows -
Three Months Ended April 1,1995
and March 26, 1994 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
Item 4 8
Item 6 and Signatures 9
1
PART I - FINANCIAL INFORMATION
WEIS MARKETS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
April 1, 1995 December 31, 1994
(Unaudited) (Unaudited)
Assets
Current Assets:
Cash $ 6,803 $ 4,011
Marketable Securities 455,328 453,017
Accounts Receivable, Net 29,111 24,132
Inventories 135,751 130,019
Prepaid Expenses 4,942 4,229
Deferred Income Taxes 3,250 2,344
Total Current A 635,185 617,752
Property and Equipment, 247,585 245,263
Intangible and other Ass 28,575 29,078
Total A $ 911,345 $ 892,093
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payabl $ 85,303 $ 82,529
Accrued Expenses 10,594 8,266
Accrued Self-Insurance 12,747 10,462
Payable to Employee Bene 8,469 7,957
Income Taxes 11,275 3,089
Total Current L 128,388 112,303
Deferred Income Taxes 17,543 17,495
Minority Interest (85) (85)
Shareholders' Equity
Common Stock 7,380 7,380
Retained Earnings 845,806 834,995
Net Unrealized Gain on M 4,989 4,933
858,175 847,308
Less Treasury Stock, At (92,676) (84,928)
Total Sharehold 765,499 762,380
Total Liabilities and
Shareh $ 911,345 $ 892,093
<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
04/01/95 03/26/94
Net Sales $ 397,499 $ 372,626
Cost of Sales 295,607 279,840
Gross Profit 101,892 92,786
Operating, General and
Administrative expenses 80,699 74,835
21,193 17,951
Interest and Dividend Incom 5,344 5,402
Other Income 3,285 3,739
Minority Interest 3
Income before provision
for income taxes 29,822 27,095
Provision for income taxes 10,760 9,697
Net Income $ 19,062 $ 17,398
Weighted average number of common
shares outstanding 43,355,392 43,766,876
Cash dividends per $ 0.19 $ 0.18
Earnings per common share negligible
difference if full $ 0.44 $ 0.40
<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
04/01/95 03/26/94
Cash flows from operating activities:
Net Income $ 19,062 $ 17,398
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,107 7,631
(Gain) on disposition of fixed as 0 (10)
Changes in operating assets and liabilities:
Increase in inventories (5,732) (6,311)
Increase in accounts receivable,
prepaid expenses and other as (5,691) (1,144)
Increase in accounts payable,
accrued expenses, other liabilities and
minority interest 7,901 7,536
Increase in income taxes payabl 8,186 4,591
Increase/(Decrease) in deferred (802) 187
Net cash provided by operating
activities 31,031 29,878
Cash flows from investing activities:
Purchase of property and equipment (9,928) (6,924)
Increase in intangible assets 0 (416)
Proceeds from the sale of property a 0 19
Increase in marketable securities (2,311) (19,188)
Net cash used by investing (12,239) (26,509)
Cash flows from financing activities:
Proceeds from issuance of common sto 0 4
Dividends paid (8,252) (7,873)
Purchase of treasury stock (7,748) (1,366)
Net cash used by financing (16,000) (9,235)
Net increase (decrease) in cash 2,792 (5,866)
Cash at beginning of period 4,011 9,066
Cash at end of period $ 6,803 $ 3,200
<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 April 1, 1995 and the
results of operations for the three months then ended, and statements
of cash flows for the three months then ended.
2. The comparative balance sheet for December 31, 1994 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 April
1, 1995 and March 26, 1994 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 April 1, 1995, increased 6.7% to
$397,499,000 compared with $372,626,000 in the same quarter last
year. The continuing positive sales growth trend came from both
new and existing stores even though competitive pressures
remained high. SuperPetz, the 80% held pet supply stores
subsidiary, grew from two stores in the first quarter of 1994 to 14
stores at the end of the current quarter. Sales from that operation
contributed an additional $4,500,000 versus the same period last
year. The company plans to continue being aggressive in its current
market area while actively seeking new store sites and working on
potential acquisitions.
Gross profit of $101,892,000 at 25.6% of sales, increased
$9,106,000 or 9.8% versus the same quarter last year from increased
sales volume. Gross profit as a percentage of sales increased .7%
over the gross profit rate generated in the same quarter a year ago.
Operating expenses of $80,699,000 at 20.3% of sales, increased
$5,864,000, or 7.8% compared to the same quarter last year. The
dollar increase in all expense categories was from new store
additions at Weis and SuperPetz and the six store King's
Supermarkets acquisition made in August of last year. Operating
expenses at SuperPetz runs substantially higher as a percent of
sales and a will continue to have an increasing effect on the total
percent as new stores are opened throughout this year.
Interest and dividend income earned in the quarter of $5,344,000
at 1.3% of sales, decreased $58,000, or 1.1% versus the same
quarter last year. The company portfolio consists primarily of
Pennsylvania tax free municipal bonds. Yield rates on bonds have
continued to slip backwards thus causing the lower interest income.
Other income for the quarter of $3,285,000 at .8% of sales decreased
$454,000, or 12.1% compared to the same period last year.
Minority interest represents the 20% outside holdings of the
SuperPetz net income before tax for the quarter. The company
conservatively wrote off all pre-opening expenses associated with
new stores to be opened in the second quarter of this year, thus
reducing the income to $0.
The effective tax rate for the first quarter was 36.1% compared to
35.8% for the same quarter in 1994.
Net earnings for the quarter of $19,062,000, or 44 cents per share,
compared with $17,398,000, or 40 cents per share, in 1994.
The Company had grand reopenings at three remodeled and
enlarged stores during the quarter. Construction is currently in
progress on seven new stores with major remodels of four existing
stores in various stages of completion. Weis Markets has two new
replacement grocery stores and SuperPetz has five pet supply
stores scheduled to open during the second quarter.
At the end of the quarter, Weis Markets, Inc., had 149 food stores
in operation in Pennsylvania, Maryland, New Jersey, New York,
Virginia and West Virginia, along with Weis Food Service, a
restaurant and institutional supplier. SuperPetz, Inc. now operates 14
stores located in Pennsylvania, Ohio, Georgia, and South Carolina.
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 period ended
April 1, 1995 and during the comparable time period in 1994, were for
acquisitions, the enlargement and remodeling of existing retail stores
and continued upgrading of the processing and distribution facilities.
Year- to-date property, equipment and acquisition expenditures
amounted to $9,928,000, compared to $7,340,000 in 1994. The
beginning of the year capital projections estimate of $105,000,000 for
eighteen months appears to be on schedule.
The purchase of Treasury Stock during the quarter of $7,748,000
compared with $1,366,000 purchased in the same quarter of 1994.
The Board of Directors 1991 resolution authorizing the purchase of
Treasury Stock, has been fully used. On January 26, 1995, the Board
of Directors unanimously approved the authorization to repurchase
an additional 1,000,000 treasury shares on the open market. Cash
dividends totaling $8,252,000 were paid during the quarter to holders
of common stock at a rate of 19 cents per share. On April 4, 1995, the
Board of Directors declared a normal quarterly dividend of 19 cents
a share to holders of record on May 12, 1995, payable on May 26,
1995.
The company's capital requirements through during the first
quarter were financed entirely from internally generated funds. The
working capital has increased 2.4% 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 acquisitions of grocery stores, pet
supply stores, food service operations and other types of business
relationships which could be benefit to the overall value of the
company. 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 April 1, 1995.
7
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of Weis Markets, Inc., was
held on Tuesday, April 4, 1995, at 10:00 a.m., Eastern Standard Time,
at the principal office of the Corporation.
(b) Proxies for the meeting were solicited pursuant to Regulation 14
under the Act, there was no solicitation in opposition to the
management's nominees as listed in the proxy statement, and all
such nominees were elected.
(c) The meeting was held for the following purposes:
1. To elect six directors to serve, subject to provisions of the
by-laws, until the next Annual Meeting of shareholders or until their
respective successors have qualified.
2. To approve a 1995 Stock Option Plan.
3. To approve the appointment of auditors for the current fiscal year.
4. To act upon such other business as may properly come before
such meeting, or any adjournments or postponements thereof.
The official ballot from the meeting submitted to the Secretary by the
Judge of Elections disclosed the following tabulation of votes.
Proposal #1 For Withhold %
Robert F. Weis 41,807,538 30,608 96.2
Norman S. Rich 41,814,853 23,293 96.2
Micheal C. Rheam 41,805,343 32,803 96.2
Joseph I. Goldstein 41,815,922 22,224 96.2
Peter M. Sacerdote 41,809,430 28,716 96.2
Richard E. Shulman 41,810,971 27,174 96.2
Proposal #2 For Against Abstain %
Proposal to approve
1995 Stock Option Plan 41,506,639 134,479 121,430 95.5
Proposal #3 For Against Abstain %
Proposal to approve the
appointment of KPMG Peat
Marwick, LLP, as the
independent public accountants
of the corporation 41,773,957 12,879 51,308 96.1
8
PART II - OTHER INFORMATION
(continued)
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 April 1, 1995
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
ROBERT F. WEIS
Chairman of the Board & Treasurer
Date
WILLIAM R. MILLS
Vice President-Finance & Secretary
9