What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-28 compared with 2023-03-01 · 42 added, 42 removed, 535 unchanged (14% of the section changed)

88 unchanged sentences

53 Weeks Ended

52 Weeks Ended

(amounts in thousands)

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See accompanying notes to Consolidated Financial Statements.

Cash paid for income taxes was $ 37.4 million, $ 24.8 million and $ 42.3 million in 2022, 2021 and 2020, respectively.

Cash paid for interest related to long-term debt was $ 40 thousand , $ 32 thousand and $ 34 thousand in 2022, 2021 and 2020, respectively.

Cash paid for income taxes was $ 43.8 million, $ 37.4 million, $ 24.8 million in 2023, 2022 and 2021, respectively.

Cash paid for interest related to long-term debt was $ 41 thousand, $ 40 thousand, $ 32 thousand in 2023, 2022 and 2021, respectively.

WEIS MARKETS, INC.

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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 31, 2022 and December 25, 2021 totaled $ 80.5 million and $ 692 thousand, respectively.

Investment amounts classified as cash equivalents as of December 30, 2023 and December 31, 2022 totaled $ 118.4 million and $ 80.5 million, 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.

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

The Company recognized a $ 275 thousand loss in 2023 and a $ 1.3 million loss in 2022.

(g) Accounts Receivable

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The Company expenses advertising costs as incurred.

The Company recorded advertising expense, before vendor paid cooperative advertising credits, of $ 23.7 million in 2022, $ 24.9 million in 2021 and $ 24.5 million in 2020 in “Cost of Sales, including Advertising, Warehousing and Distribution Expenses.”

The Company recorded advertising expense, before vendor paid cooperative advertising credits, of $ 24.2 million in 2023, $ 23.7 million in 2022, $ 24.9 million in 2021 in “Cost of Sales, including Advertising, Warehousing and Distribution Expenses.”

(u) Rental and Commission Income

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The Company provides a variety of services to its customers, including but not limited to lottery, money orders, third-party gift cards, and third-party bill pay services.

Commission income earned from these services are recorded when earned as a component of “Operating, general and administrative expenses.” The Company recorded commission income of $ 18.0 million in 2022, $ 18.9 million in 2021 and $ 17.7 million in 2020.

Commission income earned from these services are recorded when earned as a component of “Operating, general and administrative expenses.” The Company recorded commission income of $ 17.6 million in 2023, $ 18.0 million in 2022, $ 18.9 million in 2021.

(v) 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 accounting policies.

The Company believes there is one accounting standard update that has or will have a material or significant impact on the Company’s accounting policies.

The FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), that is intended to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 requires disclosures of reconciliation of the expected tax at the applicable statutory federal income tax rate to the reported tax in a tabular format, using both percentages and amounts, broken out into specific categories with certain reconciling items of five percent or greater of the expected tax further broken out by

WEIS MARKETS, INC.

nature and/or jurisdiction, disclosure of income taxes paid, net of refunds received, broken out between federal and state and local income taxes and payments to individual jurisdictions representing five percent or more of the total income tax payments must also be separately disclosed.

The disclosures required by ASU 2023-09 are required in the Company’s annual financial statements beginning with the year ended December 28, 2024, with early adoption permitted.

Note 2 Marketable Securities

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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 $ 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.

The Company recognized investment income of $ 9.5 million, $ 3.8 million and $ 1.6 million which included unrealized losses of $ 275 thousand, $ 1.3 million and $ 900 thousand in the fiscal years ended December 30, 2023, December 31, 2022 and December 25, 2021, respectively.

Marketable securities, as of December 30, 2023 and December 31, 2022, consisted of:

6 unchanged sentences

Corporate and municipal bonds

Commercial Paper

WEIS MARKETS, INC.

(amounts in thousands)

5 unchanged sentences

Corporate and municipal bonds

Commercial paper

WEIS MARKETS, INC.

Note 2 Marketable Securities (continued)

Maturities of marketable securities classified as available-for-sale at December 30, 2023, were as follows:

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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.

The Company also maintains a non-qualified supplemental executive retirement plan (SERP) 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.

1 unchanged sentence

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 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 Company recognized investment income of $ 3.7 million in the fiscal year ended December 30, 2023, investment loss of $ 3.8 million in the fiscal year ended December 31, 2022 and investment income of $ 3.4 million in the fiscal year ended December 25, 2021, respectively.

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

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If all inventories were valued on the average cost method, which approximates current cost, total inventories would have been $ 110.3 million and $ 103.6 million higher than as reported on the above methods as of December 30, 2023 and December 31, 2022, respectively.

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

WEIS MARKETS, INC.

Note 4 Property and Equipment

5 unchanged sentences

Less accumulated depreciation and amortization

WEIS MARKETS, INC.

Note 5 Lease Commitments

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53 Weeks Ended

52 Weeks Ended

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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.

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53 Weeks Ended

52 Weeks Ending

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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.

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.

Cash paid for federal income taxes was $ 23.0 million, $ 29.4 million and $ 20.4 million in 2023, 2022 and 2021 respectively.

Cash paid for state income taxes was $ 20.8 million, $ 8.0 million and $ 4.4 million in 2023, 2022 and 2021 respectively.

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Unrecognized tax benefits

174 R&D Capitalization

Total deferred tax assets

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Unrecognized tax benefits at end of year

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 3.6 million in 2022, $ 1.7 million in 2021 and $ 1.7 million in 2020.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 0 in 2023, $ 3.6 million in 2022 and $ 1.7 million in 2021.

The Company or one of its subsidiaries files tax returns in the United States and various state jurisdictions.

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Note 12 Long-Term Debt

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.

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 September 29, 2023, with Wells Fargo Bank, N.A.

(the “Credit Agreement”).

The Credit Agreement matures on October 1, 2027 , 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 December 30, 2023, the availability under the revolving credit agreement was $ 22.3 million with $ 7.7 million of letters of credit outstanding.

2 unchanged sentences

Interest expense related to long-term debt was $ 41 thousand, $ 32 thousand and $ 32 thousand for 2023, 2022 and 2021, respectively.

Note 13 COVID-19

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 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 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.

and its subsidiaries (the Company) as of December 30, 2023 and December 31, 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the 52 week period ended December 30, 2023, the 53 week period ended December 31, 2022 and the 52 week period ended December 25, 2021, 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 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for the 52 week period ended December 30, 2023, the 53 week period ended December 31, 2022 and the 52 week period ended December 25, 2021, 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 30, 2023, 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 February 28, 2024, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

As described in Notes 1 and 9 of the consolidated financial statements, the Company operates 197 stores across seven states in the U.S.

and a centralized distribution center in Pennsylvania.

The Company’s provision for income taxes is impacted based on interpretations of various state and local income tax laws.

Management prepared the Company’s provision for state income taxes using significant judgment when interpreting the provisions of state and local tax regulations and assessing the positions taken as a result of these considerations as to whether or not the amount of benefit recorded would be more likely than not to be sustained upon examination.

As described in Notes 1 and 9 of the consolidated financial statements, the Company is engaged principally in the retail sale of food in Pennsylvania and surrounding states.

The Company’s provision for income taxes is impacted based on interpretations of various state income tax laws.

Management prepared the Company’s provision for state income taxes using significant judgment when interpreting the provisions of state tax regulations and assessing the positions taken as a result of these considerations as to whether or not the amount of benefit recorded would be more likely than not to be sustained upon examination.

We identified the evaluation of the Company’s provision for state income taxes and its assessment of more likely than not surrounding state tax positions as a critical audit matter due to the significant judgments made by management when assessing the complex provisions of the tax laws and regulations.

Auditing the matter required significant auditor judgment and increased audit effort, including the use of our state and local tax professionals, in evaluating the recorded results of management’s tax positions and their assessment of the sustainability of these tax positions.

Auditing the matter required significant auditor judgment and increased audit effort, including the use of our state tax professionals, in evaluating the recorded results of management’s tax positions and their assessment of the sustainability of these tax positions.

WEIS MARKETS, INC.

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.

• We involved our state and local tax professionals to assist in evaluating the application of state and local tax regulations.

Our professionals developed an independent assessment of interpretations of state and local tax positions requiring significant judgement and compared them to the Company’s recorded positions.

• We involved our state tax professionals to assist in evaluating the application of state tax regulations.

Our professionals developed an independent assessment of interpretations of state tax positions requiring significant judgement and compared them to the Company’s recorded positions.

• We tested the accuracy and completeness of the data and inputs used to calculate the effective state tax rate, current provision calculations, deferred tax assets/liabilities, more likely than not state tax positions assessment and income taxes receivable/payable rollforward.

5 unchanged sentences

Our audit procedures related to the Company’s RIM inventory include the following, among others:

• We obtained an understanding of the relevant controls, including IT general controls, surrounding the retail inventory valuation process and tested such controls for design and operating effectiveness, including automated processes and transactional data interfaces and managements review controls over these data inputs and the Company’s RIM calculation outputs.

• We obtained an understanding of the relevant controls, including IT general controls, surrounding the retail inventory valuation process and tested such controls for design and operating effectiveness, including automated processes and transactional data interfaces and management’s review controls over these data inputs and the Company’s RIM calculation outputs.

• We tested the accuracy and completeness of the key inputs into the RIM calculation, including purchases, sales, discounts, shrink and price changes (markdowns) by comparing the key inputs back to source information such as point of sale information via retail pricing and tender/cash receipts, third-party vendor invoices and third-party inventory count information, including testing of a rollforward from the inventory count date to year-end inventory valuation.

5 unchanged sentences

Philadelphia, Pennsylvania

March 1, 2023

February 28, 2024

WEIS MARKETS, INC.

4 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 30, 2023, 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 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.

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 30, 2023 and December 31, 2022, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for the 52 week period ended December 30, 2023, the 53 week period ended December 31, 2022 and the 52 week period ended December 25, 2021, and the related notes to the consolidated financial statements and the financial statement schedule listed in the accompanying index, and our report dated February 28, 2024 expressed an unqualified opinion.

Basis for Opinion

17 unchanged sentences

Philadelphia, Pennsylvania

March 1, 2023

February 28, 2024

WEIS MARKETS, INC.

1 unchanged sentence

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