What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-01 compared with 2022-03-10 · 55 added, 60 removed, 522 unchanged (18% of the section changed)

29 unchanged sentences

Retained earnings

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

(Net of deferred taxes of $ 2,342 in 2022 and $ 669 in 2021)

29 unchanged sentences

(Net of deferred taxes of $ 3,011 , $ 630 and $ 706 , respectively)

Reclassification adjustment for (gains) losses included in net income

(Net of deferred taxes of $ 0 , $ 0 and $ 14 , respectively)

Other comprehensive income (loss), net of tax

11 unchanged sentences

Balance at December 28, 2019

Other comprehensive income, net of

reclassification adjustments and tax

Other comprehensive income (loss), net of tax

Dividends paid

10 unchanged sentences

53 Weeks Ended

52 Weeks Ended

(amounts in thousands)

7 unchanged sentences

(Gain) loss on disposition of fixed assets

(Gain) on sale of marketable securities

Unrealized (gain) loss in value of equity securities

49 unchanged sentences

The Company considers investments with an original maturity of three months or less to be cash equivalents.

Investment amounts classified as cash equivalents as of December 25, 2021 and December 26, 2020 totaled $ 692 thousand and $ 95.9 million, respectively.

Investment amounts classified as cash equivalents as of December 31, 2022 and December 25, 2021 totaled $ 80.5 million and $ 692 thousand, respectively.

Consumer electronic payments accepted at the point of sale, including all credit card, debit card and electronic benefits transfer transactions that process in three days or less are classified as cash equivalents.

7 unchanged sentences

Available-for-sale securities are recorded at fair value as determined by quoted market price based on national markets.

To determine fair value the Company utilizes standard pricing procedures of its investment advisory firm(s), which include various third-party pricing services.

If the cost of an investment exceeds its fair value, the Company evaluates general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost.

Unrealized holding gains and losses, net of the related tax effect, on corporate and municipal bonds and commercial paper are excluded from earnings and are reported as a separate component of shareholders’ equity until realized.

Unrealized holding gains and losses on equity securities are recorded in investment income (loss) and interest expense.

A decline in the fair value below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security.

Dividend and interest income is recognized when earned.

2 unchanged sentences

Equity securities are measured at fair value and the unrealized holding gains and losses are recorded in investment income (loss) and interest expense.

The Company recognized a $ 900 thousand loss in 2021 and a $ 1.8 million loss in 2020.

The Company recognized a $ 1.3 million loss in 2022 and a $ 900 thousand loss in 2021.

(g) Accounts Receivable

88 unchanged sentences

Promotional rebates and credits are accounted for as a reduction in the cost of inventory and recognized when the related inventory is sold.

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.

Volume incentive discounts are accounted for as a reduction of cost of sales and realized using estimated amounts at the time it is deemed probable that the incentive target will be reached.

Long-term contract incentives, which require an exclusive vendor relationship, are allocated over the life of the contract.

30 unchanged sentences

Level 3 Unobservable 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 three public company equity securities, for which quoted market prices are available.

The Company’s marketable securities valued using Level 1 inputs include four public company equity securities, for which quoted market prices are available.

The Company’s bond and commercial paper portfolio is valued using Level 2 inputs.

5 unchanged sentences

Both interest and dividends are recognized in “Investment income and interest expense” on the Company’s Consolidated Statements of Income.

The Company recognized investment income of $ 1.6 million, $ 536 thousand and $ 4.1 million which included an unrealized loss in equity securities of $ 900 thousand, an unrealized loss in equity securities of $ 1.8 million and an unrealized gain in equity securities of $ 2.0 million in the fiscal years ended December 25, 2021, December 26, 2020 and December 28, 2019, respectively.

The Company recognized investment income of $ 3.8 million, $ 1.6 million and $ 536 thousand which included unrealized losses of $ 1.3 million, $ 900 thousand, and $ 1.8 million in the fiscal years ended December 31, 2022, December 25, 2021 and December 26, 2020, respectively.

Marketable securities, as of December 31, 2022 and December 25, 2021, consisted of:

6 unchanged sentences

Corporate and municipal bonds

Commercial Paper

(amounts in thousands)

5 unchanged sentences

Corporate and municipal bonds

Commercial paper

WEIS MARKETS, INC.

6 unchanged sentences

Due after five years through ten years

Due after ten years

SERP Investments

3 unchanged sentences

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 and interest expense” on the Company’s Consolidated Statements of Income.

The Company recognized investment income of $ 3.4 million, $ 3.3 million, and $ 3.0 million in fiscal years ended December 25, 2021, December 26, 2020, and December 28, 2019.

The Company recognized investment loss of $ 3.8 million in the fiscal year ended December 31, 2022, and investment income of $ 3.4 million and $ 3.3 million in fiscal years ended December 25, 2021 and December 26, 2020, respectively.

The changes in the underlying liability to the associates are recorded in “Other income (expense).”

Note 3 Inventories

Merchandise inventories, as of December 25, 2021 and December 26, 2020, were valued as follows:

Inventories, as of December 31, 2022 and December 25, 2021, were valued as follows:

(amounts in thousands)

1 unchanged sentence

If all inventories were valued on the average cost method, which approximates current cost, total inventories would have been $ 103.6 million and $ 74.5 million higher than as reported on the above methods as of December 31, 2022 and December 25, 2021, respectively.

During 2021 and 2020, the Company had certain decrements in its LIFO pools, which had an insignificant impact on the cost of sales.

During 2021 the Company had certain decrements in its LIFO pools, which had an insignificant impact on the cost of sales.

Note 4 Property and Equipment

9 unchanged sentences

53 Weeks Ended

52 Weeks Ended

(amounts in thousands)

17 unchanged sentences

Weighted-average discount rate

The following is a schedule of supplemental cash flow information related to leases as of December 31, 2022, December 25, 2021, and December 26, 2020.

(amounts in thousands)

December 31, 2022

December 25, 2021

December 26, 2020

Cash paid for amounts included in the measurement of operating lease liabilities

Right of use assets obtained in exchange for operating lease liabilities

WEIS MARKETS, INC.

Note 6 Retirement Plans

The Company has a qualified retirement savings plan, the Weis Markets, Inc.

Retirement Savings Plan, covering substantially all associates.

The plan has a contributory component as well as a noncontributory profit-sharing component for certain associates.

The noncontributory component covers eligible associates which included certain salaried associates, store management and administrative support personnel.

The Company also has a non-qualified supplemental retirement plan covering highly compensated employees of the Company.

The Company’s policy is to fund retirement plan costs as accrued, with the exception of the deferred compensation plan.

Employer contributions to the qualified retirement plan are made at the sole discretion of the Company.

Retirement plan costs:

The following is a schedule of the retirement plan costs for the fiscal years ended December 31, 2022, December 25, 2021 and December 26, 2020.

(amounts in thousands)

Retirement savings plan

Profit Sharing

Deferred compensation plan

Supplemental executive retirement plan

The Company has a qualified retirement savings plan, the Weis Markets, Inc.

Retirement Savings Plan, covering substantially all associates.

Employer contributions are made at the sole discretion of the Company.

Prior to 2022, employer contributions consisted of a noncontributory profit-sharing component to a limited number of associates and a contributory component equal to $ 0.25 for every dollar that all eligible associates contributed to the plan, up to 6 % of their eligible pay.

In 2022, the plan was adjusted to benefit more associates by eliminating the noncontributory profit-sharing component and increasing the contributory component to $ 0.50 for every dollar that all eligible associates contributed to the plan, up to 6 % of their eligible pay.

The Company maintains a non-qualified deferred compensation plan for the payment of specific amounts of annual retirement benefits to certain officers or their beneficiaries over an actuarially computed normal life expectancy.

5 unchanged sentences

The expected payment amounts are approximately $ 1.0 million for 2023 and for the years thereafter dependent on the lives of the beneficiaries.

The Company also maintains a non-qualified supplemental executive retirement plan for certain of its associates.

The Company also maintains a non-qualified supplemental executive retirement plan covering highly compensated associates.

This plan is designed to provide retirement benefits and salary deferral opportunities because of limitations imposed by the Internal Revenue Code and the Regulations implemented by the Internal Revenue Service.

This plan is unfunded and accounted for on an accrual basis.

Participants in this plan are excluded from participation in the profit sharing portion of the Weis Markets, Inc.

Retirement Savings Plan once their yearly earnings exceed the IRS highly compensated threshold.

The Board of Directors annually determines the amount of the allocation to the plans at its sole discretion.

The allocation among the various plan participants is made in both flat dollar amounts and in relationship to their compensation.

Plan participants are 100 % vested in their accounts after three years of service with the Company.

5 unchanged sentences

The Company’s operations are reported as a single reportable segment.

The following table represents net sales by type of product for years ending December 25, 2021, December 26, 2020 and December 28, 2019.

The following table represents net sales by product category for years ending December 31, 2022, December 25, 2021 and December 26, 2020.

53 Weeks Ended

52 Weeks Ended

( amounts in thousands )

12 unchanged sentences

Marketable Securities

Accumulated other comprehensive income balance as of December 28, 2019

Accumulated other comprehensive income (loss) balance as of December 26, 2020

Other comprehensive income (loss)

Net current period other comprehensive income (loss)

Accumulated other comprehensive income balance as of December 26, 2020

Accumulated other comprehensive income (loss) balance as of December 25, 2021

Other comprehensive income (loss)

Net current period other comprehensive income (loss)

Accumulated other comprehensive income balance as of December 25, 2021

Amounts Reclassified from

Accumulated Other Comprehensive Income to the

Consolidated Statements of Income

(amounts in thousands)

Unrealized gains (losses) on available-for-sale marketable securities

Investment income (loss) and interest expense

Provision for income taxes

Total amount reclassified, net of tax

Accumulated other comprehensive income (loss) balance as of December 31, 2022

Note 9 Income Taxes

(amounts in thousands)

The reconciliation of income taxes computed at the federal statutory rate of 21 % in 2021, 2020 and 2019.

The reconciliation of income taxes has been computed at the federal statutory rate of 21 % in 2022, 2021 and 2020.

Ending deferred tax liability has been computed at the federal statutory rate of 21 %.

3 unchanged sentences

Nondeductible employee-related expenses

State deferred rate change

Provision for income taxes

The effective income tax rate was 22.1 %, 26.6 % and 27.3 % in 2022, 2021, and 2020, respectively.

The effective income tax rate differs from the federal statutory rate of 21 % primarily due to state taxes as well as nondeductible employee expenses.

Not all the Company’s tax credits and state deductions are driven proportionately by taxable income levels, due to these items and the significant increase in taxable income from prior years, the result was a higher effective income tax rate for 2021 and 2020 when compared to 2019.

WEIS MARKETS, INC.

Note 9 Income Taxes (continued)

The effective income tax rate differs from the federal statutory rate of 21 % primarily due to state taxes as well as nondeductible employee-related expenses.

The Company reduced its provision for income taxes by $ 5.5 million in 2022 primarily due to the effects of Pennsylvania House Bill 1342 which was enacted on July 8, 2022.

The bill made significant changes to the Commonwealth’s corporate income tax laws which included lowering the tax rate gradually from 9.99% in 2022 to 4.99% in 2031, updating market sourcing rules, and codifying the economic nexus standard.

Cash paid for federal income taxes was $ 29.4 million, $ 20.4 million $ 33.5 million and in 2022, 2021 and 2020 respectively.

Cash paid for state income taxes was $ 8.0 million, $ 4.4 million and $ 8.8 million in 2022, 2021 and 2020 respectively.

WEIS MARKETS, INC.

Note 9 Income Taxes (continued)

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, 2022 and December 25, 2021, are:

10 unchanged sentences

Unrealized gains on marketable securities

Nondeductible accruals and other

Total deferred tax liabilities

22 unchanged sentences

The Company also accrues for contingencies when it is probable that a liability has been incurred and the amount of the contingency can be reasonably estimated, based on experience.

In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, and liquidity.

Note 12 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 September 29, 2021 and matures on September 1, 2024 .

On September 1, 2016 Weis Markets entered into a revolving credit agreement with Wells Fargo Bank, N.A.

(the “Credit Agreement”), which was amended on September 29, 2021 and matures on September 1, 2024 .

The Credit Agreement provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed $ 30.0 million with an additional discretionary amount available of $ 70.0 million.

As of December 25, 2021, the availability under the revolving credit agreement was $ 25.3 million, net of $ 4.7 million letters of credit.

As of December 31, 2022, the availability under the revolving credit agreement was $ 25.5 million with $ 4.5 million of letters of credit outstanding.

The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company.

The Company has not had an obligation on the Credit Agreement since the second fiscal quarter of 2018.

The Company has not had an obligation on the Credit Agreement since the second quarter of 2018.

Interest expense related to long-term debt was $ 32 thousand, $ 32 thousand and $ 35 thousand for 2022, 2021 and 2020, respectively.

Note 13 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.

In March 2020, the federal government declared a national state of emergency for the COVID-19 novel coronavirus pandemic and state governments in the Company’s geographic operating area began instituting preventative shut down measures in order to combat the pandemic.

The coronavirus and actions taken to mitigate the spread of it had 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.

The Company’s business being deemed essential resulted in incremental financial performance that may not have been indicative of future financial results and there remains uncertainty and increased risks concerning its employees, customers, supply chain and government regulation.

WEIS MARKETS, INC.

3 unchanged sentences

We have audited the accompanying consolidated balance sheets of Weis Markets, Inc.

and its subsidiaries (the Company) as of December 25, 2021 and December 26, 2020, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the 52 week periods ended December 25, 2021, December 26, 2020 and December 28, 2019, and the related notes to the consolidated financial statements and the financial statement schedule listed in the accompanying index (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 25, 2021 and December 26, 2020, and the results of its operations and its cash flows for the 52 week periods ended December 25, 2021, December 26, 2020 and December 28, 2019, in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the Company) as of December 31, 2022 and December 25, 2021, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the 53 week period ended December 31, 2022, and the 52 week periods ending December 25, 2021 and December 26, 2020, and the related notes to the consolidated financial statements and the financial statement schedule listed in the accompanying index (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and December 25, 2021, and the results of its operations and its cash flows for the 53 week period ended December 31, 2022, and the 52 week periods ended December 25, 2021 and December 26, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 1, 2023 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

21 unchanged sentences

WEIS MARKETS, INC.

Our audit procedures related to the Company’s provision for state income taxes include the following, among others:

Our audit procedures related to the Company’s provision for state income taxes and its assessment of more likely than not surrounding state tax positions include the following, among others:

• We obtained an understanding of the relevant controls related to the determination of current and deferred taxes and the assessment of more likely than not surrounding state tax positions and tested such controls for design and operating effectiveness, including controls related to the interpretation and application of tax laws.

23 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 25, 2021 and December 26, 2020, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for the 52 week periods ended December 25, 2021, December 26, 2020 and December 28, 2019, and the related notes to the consolidated financial statements and the financial statement schedule listed in the accompanying index, and our report dated March 10, 2022 expressed an unqualified opinion.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and December 25, 2021, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for the 53 week period ended December 31, 2022 and the 52 week periods ended December 25, 2021 and December 26, 2020, and the related notes to the consolidated financial statements and the financial statement schedule listed in the accompanying index, and our report dated March 1, 2023 expressed an unqualified opinion.

Basis for Opinion

21 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data