-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EzBwlYuR/NjqN4PgVbi/wu0OzdGu1Qygl2adJGPE3FrROjGhI/5Ed003nF+gpo5g uMDPtZocwlpysYLqIS1akg== 0000105418-01-500010.txt : 20010402 0000105418-01-500010.hdr.sgml : 20010402 ACCESSION NUMBER: 0000105418-01-500010 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001230 FILED AS OF DATE: 20010330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEIS MARKETS INC CENTRAL INDEX KEY: 0000105418 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 240755415 STATE OF INCORPORATION: PA FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-05039 FILM NUMBER: 1586515 BUSINESS ADDRESS: STREET 1: 1000 S SECOND ST STREET 2: PO BOX 471 CITY: SUNBURY STATE: PA ZIP: 17801 BUSINESS PHONE: 570-286-4571 MAIL ADDRESS: STREET 1: 1000 S SECOND ST STREET 2: P O BOX 471 CITY: SUNBURY STATE: PA ZIP: 17801 10-K 1 wmk10k2000.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the fiscal year ended December 30, 2000 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 (IRS Employee Identification No.) incorporation or organization) 1000 South Second Street, Sunbury, PA 17801 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 570-286-4571 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common stock, no par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of class) 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 The aggregate market value of Common Stock held by non-affiliates of the Registrant is approximately $892,986,000. Shares of common stock outstanding as of March 1, 2001 - 41,688,157. The index to Exhibits is located in Part IV, Item 14(c). DOCUMENTS INCORPORATED BY REFERENCE: None WEIS MARKETS, INC. PART I Item 1. Business: (a) Weis Markets, Inc. is a Pennsylvania business corporation formed in 1924. The company is engaged principally in the retail sale of food and pet supplies in Pennsylvania and surrounding states. There was no material change in the nature of the company's business during fiscal 2000. (b) The principal business activity that the company has been engaged in for the last five fiscal years is the retail sale of food. (c)(1)(i) The company operates 133 retail food markets in Pennsylvania, 22 in Maryland, 3 in New Jersey, 3 in New York, 1 in Virginia, and 1 in West Virginia. The stores trade under the name Weis Markets, except for 19 Pennsylvania stores which trade as Mr. Z's Food Mart, 6 Pennsylvania stores that trade as King's Supermarkets, 3 Pennsylvania stores which trade as Save-A-Lot, 3 Pennsylvania stores which trade as Scot's Lo Cost and 1 Pennsylvania store which trades as Cressler's Marketplace. During the past fiscal year, 9 new stores were opened, 4 of which were replacements for 5 older units. Four additional stores were closed for financial reasons. SuperPetz, a pet supply chain, operated 2 stores in Alabama, 1 store in Georgia, 1 store in Indiana, 1 store in Kentucky, 1 store in Maryland, 2 stores in Michigan, 8 stores in Ohio, 7 stores in Pennsylvania, 6 stores in South Carolina, and 4 stores in Tennessee. One SuperPetz store was closed for financial reasons. The company supplies its retail stores from distribution centers in Sunbury, Northumberland, and Milton, Pennsylvania. The percentage of net sales contributed by each class of similar products for each of the five fiscal years ended December 30, 2000 was: Year Grocery Meat Produce Pharmacy Pet Supply Other 1996 56.77 13.87 10.80 4.67 4.17 9.72 1997 56.00 13.84 11.06 5.25 4.43 9.42 1998 55.63 13.74 11.60 5.94 4.01 9.08 1999 55.56 13.88 11.97 6.62 3.27 8.70 2000 57.13 15.09 12.65 7.75 3.15 4.23 (c)(1)(vi) The company has its own distribution center with warehouses located within a 15 mile radius of its corporate offices in Sunbury, Pennsylvania. The company is required to use a significant amount of working capital to provide for the required amount of inventory to meet demand for its products through efficient use of buying power and effective utilization of space in the warehouse facilities. (c)(1)(x) The business of the company is highly competitive. The number of competitors and the amount of competition experienced by the company's stores vary by market area. National, regional, and local food chains, as well as independent food stores comprise the company's principal competition, although the company also faces substantial competition from convenience stores, membership warehouse clubs, specialty retailers, supercenters, and large-scale drug and pharmaceutical chains. The company competes based on price, quality, location, and service. (c)(1)(xiii) The company has approximately 20,700 employees. Item 2. Properties: The company owns and operates 81 of its retail food stores, and leases and operates 82 stores under operating leases for varying periods of time up to the year 2024. SuperPetz leases all 33 of its retail store locations. The company owns all of its trade fixtures and equipment in its stores and several parcels of vacant land which are available as locations for possible future stores or other expansion. 2 WEIS MARKETS, INC. The company owns and operates one warehouse in Milton, Pennsylvania of approximately 1,109,000 square feet, and one in Northumberland, Pennsylvania totaling approximately 76,000 square feet. The company also owns one warehouse in Sunbury, Pennsylvania totaling approximately 551,000 square feet of which 290,000 is sublet. The company operates an ice cream plant, meat processing plant and milk processing plant in the remaining 261,000 square feet at its Sunbury location. Item 3. Legal Proceedings: Neither the company nor any subsidiary is presently a party to, nor is any of their property subject to, any material pending legal proceedings, other than routine litigation incidental to the business. In the fourth quarter of fiscal 2000, a jury determined that the company breached its lease related to the company's failure to conduct business as a supermarket at one location and awarded PVC Realty, a Pennsylvania Limited Liability Partnership, $6.5 million for lost profits and $15 million for punitive damages. The company settled this litigation with the plaintiff in late January 2001 and accrued a $4.9 million expense in the fourth quarter of 2000. Item 4. Submission of Matters to a Vote of Security Holders: There were no matters submitted to a vote of security holders during the fourth quarter of 2000. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters: The trading symbol for the company's common stock on the NYSE is "WMK." The approximate number of shareholders including individual participants in security positions listings on December 30, 2000 as provided by the company's transfer agent was 5,951. The following table sets forth, for the periods indicated, the high and low sale prices for the company's common stock as reported by NYSE and the dividends paid per share. Stock Prices and Dividend Information by Quarter 2000 1999 ________________________________________________________________________________ 4th 3rd 2nd 1st 4th 3rd 2nd 1st ________________________________________________________________________________ Stock Prices High 42 3/4 37 1/8 35 13/16 45 1/4 43 3/8 40 38 7/8 40 1/4 Low 34 5/16 32 7/16 32 34 3/16 33 33 5/8 32 7/8 35 5/8 Dividends Per Share .27 .27 .26 .26 .26 .26 .25 .25 Item 6. Selected Financial Data: The following selected historical financial information has been derived from the company's audited consolidated financial statements. This information should be read in connection with the company's Consolidated Financial Statements and the Notes thereto, as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in Item 7. 3
WEIS MARKETS, INC. Five Year Review of Operations 53 Weeks 52 Weeks 52 Weeks 52 Weeks 52 Weeks (dollars in thousands, Ended Ended Ended Ended Ended (except per share amounts) Dec. 30, 2000 Dec. 25, 1999 Dec. 26, 1998 Dec. 27, 1997 Dec. 28, 1996 _________________________________________________________________________________________________________ Net sales $ 2,060,976 $ 2,004,947 $ 1,867,492 $ 1,818,816 $ 1,753,246 Costs and expenses 1,980,893 1,911,912 1,791,066 1,733,686 1,662,620 _________________________________________________________________________________________________________ Income from operations 80,083 93,035 76,426 85,130 90,626 Other income, net 36,729 30,980 58,072 33,452 30,083 _________________________________________________________________________________________________________ Income before provision for income taxes 116,812 124,015 134,498 118,582 120,709 Provision for income taxes 42,989 44,290 50,815 40,388 41,854 _________________________________________________________________________________________________________ Net income 73,823 79,725 83,683 78,194 78,855 Retained earnings, beginning of year 1,040,354 1,003,170 960,419 921,572 879,916 _________________________________________________________________________________________________________ 1,114,177 1,082,895 1,044,102 999,766 958,771 Cash dividends 44,191 42,541 40,932 39,347 37,199 _________________________________________________________________________________________________________ Retained earnings, end of year $ 1,069,986 $ 1,040,354 $ 1,003,170 $ 960,419 $ 921,572 ========================================================================================================= Weighted-average shares outstanding 41,695,347 41,718,188 41,775,991 41,842,583 42,280,352 ========================================================================================================= Cash dividends per share $ 1.06 $ 1.02 $ .98 $ .94 $ .88 ========================================================================================================= Basic and diluted earnings per share $ 1.77 $ 1.91 $ 2.00 $ 1.87 $ 1.87 ========================================================================================================= Working capital $ 496,906 $ 481,728 $ 489,475 $ 471,562 $ 463,255 Total assets $ 1,085,904 $ 1,058,221 $ 1,029,202 $ 971,752 $ 966,312 Shareholders' equity $ 947,886 $ 918,477 $ 890,641 $ 847,333 $ 818,527 Number of grocery stores 163 163 158 154 155 Number of pet supply stores 33 34 36 43 43
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: Results of Operations Total sales for fiscal 2000, a 53-week year, rose 2.8% to $2.061 billion, an increase of $56.0 million over 1999. Company sales in 1999 totaled $2.005 billion, a 7.4% increase over 1998 sales of $1.867 billion. Sales generated from units open a full year (identical store sales), in 2000, 1999 and 1998 increased 2.5%, 4.0% and 1.5%, respectively. Excluding the effect of the one additional week in the current year, identical store sales increased .4%. Management attributes the relatively flat store sales performance to a soft sales environment in its markets, a higher level of competitive activity and delays in some new store openings, remodels and expansions. Early in the second quarter, the company sold Weis Food Service (WFS), its regional food service division. In recent years, the company has strongly focused its attention on the growth of its core operations, the retail food business. As part of this focus, senior management moved to sell WFS after concluding its supermarket and food service divisions had evolved into businesses with separate distribution, marketing and operational requirements. Excluding sales generated from the WFS division, the company's year to date sales results from ongoing operations grew 8.0% in fiscal 2000. The cost of goods sold in 2000 increased 1.5% to $1.518 billion as the result of the increase in sales volume. Gross profit realized on total sales in 2000 increased by $34.3 million, or 6.7%, to $542.9 million compared to 1999 and by $37.9 million or 8.0% in 1999 compared to 1998. Gross profit as a percentage of sales remained relatively consistent at 25.4% and 25.2% in 1999 and 1998, respectively, increasing slightly to 26.3% in 2000. The sales mix in the food service division with its lower gross profits slightly decreased the company's overall gross profit percentage in prior years. The impact on sales from food price inflation has remained negligible for the last several years. Adjustments to LIFO inventory reserves have also been minimal over the past three years increasing earnings $591,000 in 2000, $612,000 in 1999 and decreasing earnings $84,000 in 1998. 4 WEIS MARKETS, INC. Operating, general and administrative expenses as a percentage of sales increased 1.7% in 2000 compared to 1999. Total operating expenses of $462.8 million or 22.4% of sales, compares to 20.7% in 1999 and 21.1% in 1998. A substantial portion of the $47.2 million increase in operating expenses in 2000 is due to higher sales volume although several unusual events also affected operating expenses in the current year. Employee labor and benefit costs over the past two years have disproportionately affected net income, increasing 6.9% in 2000 and 9.4% in 1999, due to a tight employment market, higher health insurance costs and the need for additional employees in newer units, which are larger and have more service departments. The company remained aggressive with its advertising and special promotion spending, which increased $6.7 million over the prior year. Fixed occupancy costs increased $7.7 million or 8.8% because the company's capital expenditure program has continued at an ambitious pace compared to the industry average over the last several years. Following the sale of the food service division, the company wrote off $314,000 in goodwill from prior food service acquisitions and increased its reserve for bad debts by $2.7 million for the remaining customer receivable accounts. The company also recorded a litigation settlement of $4.9 million and spent $3.8 million in expenses related to the company's ongoing examination of various options for increasing shareholder value. In addition to rising labor costs in 1998, company management determined that certain intangible assets exceeded future benefits and reduced the carrying amount of these assets $2.8 million to their fair value during that year. Management also accrued $5.6 million for exit costs associated with the closing of several under-performing SuperPetz stores. In 2000, the company realized $18.6 million in investment income, a $1.3 million decrease from 1999. The company realized gains on the sale of marketable securities of $1.3 million in 2000, $3.5 million in 1999 and $30.4 million in 1998. The company's investment portfolio consists of Pennsylvania tax-free state and municipal bonds, U.S. Treasury securities, U.S. Government federal agency notes, equity securities and other short-term investments. It is management's intent to maintain a liquid portfolio to take advantage of acquisitions and other investment opportunities. Therefore, all securities are classified as available-for-sale on the consolidated balance sheets. Other income in 2000 of $18.2 million or .9% of sales, increased $7.1 million compared to 1999. This increase includes $5.8 million realized from the sale of the company's food service division in the second quarter of the year. Other income as a percentage of sales was consistent in 1999 and 1998. The company's other income is generated from rental income, coupon- handling fees, cardboard salvage and gains on sales of fixed assets. The company's effective tax rate was 36.8% in 2000, 35.7% in 1999 and 37.8% in 1998. The tax rate increased in the current year as the company decreased its position in Pennsylvania tax-free municipal bonds and invested in U.S. Government federal agency notes, which are federally taxable. The higher tax rate in 1998 was due to the substantial increase in taxable investment income in that year. Net income in 2000 was $73.8 million or 3.6% of sales compared with $79.7 million or 4.0% of sales in 1999 and $83.7 million or 4.5% of sales in 1998. Basic and diluted earnings per share of $1.77 in 2000 compared to $1.91 in 1999 and $2.00 in 1998. Several unusual items notably affected net income and the basic and diluted earnings per share in all three years. In 2000, the company accrued $4.9 million for a litigation settlement and spent $3.8 million in expenses related to the company's ongoing examination of various options for increasing shareholder value. In 1999, the company realized a pre-tax gain of $3.4 million from the sale of an investment in a privately held company. In 1998, the company reported a pre-tax gain of $30.4 million generated from the sale of two marketable securities and accrued for a pre-tax expense of $5.6 million associated with exit costs for several under-performing SuperPetz units. Excluding these unusual charges and credits, the earnings generated by WFS and the gain from its sale, earnings increased 1.3% in 2000 and 13.5% in 1999. Using these same adjustments, basic and diluted earnings per share would have been $1.86 in 2000 compared to $1.84 in 1999 and $1.61 in 1998. As of the end of the fiscal year, Weis Markets, Inc. operated 163 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. 5 WEIS MARKETS, INC. Liquidity and Capital Resources Net cash provided by operating activities during 2000 was $125.6 million compared with $111.9 million in 1999 and $115.6 million in 1998. Depreciation continues to increase in conjunction with the company's aggressive capital expenditure program embarked upon in 1995. As a percentage of sales, capital expenditures of 3.4%, 4.3% and 4.3% in 2000, 1999 and 1998, respectively, have outpaced the 2.9% industry average. In 1998, the company sold its interest in AquaPenn Spring Water Co., Inc. during that company's initial public offering (NYSE: APN) and its interest in Giant Food Inc. (AMEX GFSa) in a tender offer by Koninklijke Ahold N.V. (NYSE: AHO). Consequently, the company realized capital gains of $30.4 million from these transactions. Accounts receivable decreased after the sale of the company's food service division in early 2000. Working capital increased 3.2% in 2000, decreased 1.6% in 1999 and increased 3.8% in 1998. Net cash used in investing activities during 2000 was $82.4 million compared to $70.0 million in 1999 and $69.7 million in 1998. Property and equipment purchases during fiscal 2000 totaled $56.3 million compared to $86.7 million in 1999 and $77.0 million in 1998. Intangible and other assets increased $13.4 million in 2000 and $3.6 million in 1998 with various grocery store acquisitions. Proceeds from the sale and maturity of marketable securities in each of the past three years were used for the purchase of new securities and the purchase of property and equipment. Management anticipates the continued use of the company's cash for acquisitions, the construction of new superstores, the expansion and remodeling of existing stores, the securing of sites for future expansion, new technology purchases and the upgrading of its processing and distribution facilities. In addition, the company continues to work with its financial advisor, Morgan Stanley Dean Witter, to develop proposals to enhance shareholder value and address issues concerning the company's strategic direction. Some of these proposals may require the use of some or all of the company's cash resources and or the incurrence of indebtedness. Net cash used in financing activities during 2000 was $44.4 million compared to $44.8 million in 1999 and $41.5 million in 1998. Treasury stock purchases in the last three years were minimal. The Board of Directors' 1996 resolution authorizing the purchase of 1,000,000 shares of treasury stock has a remaining balance of 573,385 shares. Total cash dividend payments on common stock amounted to $1.06 per share in 2000 compared to $1.02 per share in 1999 and $.98 in 1998. In 2000, the company funded its working capital requirements through internally generated cash flows from operations, as it has done in prior years. Company management estimates that its current development plans will require an investment of approximately $95.2 million over the next eighteen months. The financial and liquidity position of the company, combined with its historical insurance loss experience rates, has allowed it to carry higher deductible and retention levels on its employee and business insurance coverage. The company plans to maintain these higher exposure levels, thus benefiting from reduced premium expenses. The company has significant liquid assets, no debt financing and has historically displayed an ability to generate working capital internally to fund growth. It is not expected that any type of external financing will be needed for these activities in the coming year. The company's earnings and cash flows are subject to fluctuations due to changes in interest rates as they relate to investments. The company's marketable securities consist of Pennsylvania tax-free state and municipal bonds, U.S. Government federal agency notes, U.S. Treasury securities, equity securities and other short-term investments that are classified as available-for-sale. By their nature, these financial instruments inherently expose the holders to market risk. The extent of the company's interest rate and other market risk is not quantifiable or predictable with precision due to the variability of future interest rates and other changes in market conditions. However, the company believes that its exposure in this area is not material. Under its current policies, the company invests primarily in high-grade marketable securities and does not use interest rate derivative instruments to manage exposure to interest rate fluctuations. In addition, the company's principal investment strategy of obtaining marketable securities with maturity dates between one and five years helps minimize market risk and maintains a balance between risk and return. The equity securities owned by the company consist primarily of stock held in large capitalized companies trading on public security exchange markets. Weis Markets' management continually monitors the risk associated with its marketable securities. A quantitative tabular presentation of risk exposure in Item 7A. 6 WEIS MARKETS, INC. Forward-Looking Statements In addition to historical information, this Form 10-K 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. Item 7A. Quantitative and Qualitative Disclosures about Market Risk: Quantitative Disclosures about Market Risk is presented in tabular format below. Qualitative disclosures about market risk is discussed within the "Liquidity and Capital Resources" section of Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Quantitative Disclosures About Market Risk (dollars in thousands) Expected Maturity Dates Fair Value December 30, 2000 2001 2002 2003 2004 2005 Thereafter Total Dec. 30, 2000 ___________________________________________________________________________________________________________________________ Rate sensitive assets: Fixed interest rate securities $ 301,531 $ 29,675 $ 20,920 $ 13,850 $ 25,820 - $ 391,796 $ 392,405 Average interest rate 4.29% 4.30% 4.30% 4.33% 4.43% 4.31% Variable interest rate securities $ 1,446 - - - - - $ 1,446 $ 1,446 Average interest rate 4.00% - - - - - 4.00%
(dollars in thousands) Expected Maturity Dates Fair Value December 25, 1999 2000 2001 2002 2003 2004 Thereafter Total Dec. 25, 1999 ___________________________________________________________________________________________________________________________ Rate sensitive assets: Fixed interest rate securities $ 95,389 $ 110,263 $ 47,616 $ 28,325 $ 25,815 $ 34,739 $ 342,147 $ 350,204 Average interest rate 4.43% 4.42% 4.38% 4.38% 4.43% 4.47% 4.42% Variable interest rate securities $ 12,317 - - - - $ 1,000 $ 13,317 $ 13,317 Average interest rate 2.68% - - - - 3.48% 2.74%
Other relevant market risks: The company's equity securities at December 25, 1999 had a cost basis of $5,262,000 and a market value of $21,142,000. The dividend yield realized on these equity investments was 1.59% in 1999. The company's equity securities at December 30, 2000 had a cost basis of $3,131,000 and a market value of $16,367,000. The dividend yield realized on these equity investments was 2.52% in 2000. Market risk, as it relates to equities owned by the company, is discussed within the Liquidity and Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of Operations contained within Item 7. 7 WEIS MARKETS, INC. Item 8. Financial Statements and Supplementary Data: Consolidated Balance Sheets (dollars in thousands) December 30, 2000 and December 25, 1999 2000 1999 ___________________________________________________________________________ Assets Current: Cash $ 3,389 $ 4,552 Marketable securities 410,218 384,663 Accounts receivable, net 25,080 34,737 Inventories 168,541 167,146 Prepaid expenses 6,821 5,672 Income taxes recoverable 3,144 4,338 Deferred income taxes - 1,460 ___________________________________________________________________________ Total current assets 617,193 602,568 ___________________________________________________________________________ Property and equipment, net 441,819 439,418 Intangible and other assets, net 26,892 16,235 ___________________________________________________________________________ $ 1,085,904 $ 1,058,221 =========================================================================== Liabilities Current: Accounts payable $ 78,162 $ 82,742 Accrued expenses 18,360 16,283 Accrued self-insurance 12,959 13,255 Payable to employee benefit plans 8,663 8,560 Deferred income taxes 2,143 - ___________________________________________________________________________ Total current liabilities 120,287 120,840 ___________________________________________________________________________ Deferred income taxes 17,731 18,904 ___________________________________________________________________________ Shareholders' Equity Common stock, no par value, 100,800,000 shares authorized, 47,453,979 and 47,452,729 shares issued, respectively 7,594 7,559 Retained earnings 1,069,986 1,040,354 Accumulated other comprehensive income (Net of deferred taxes of $5,166 in 2000 and $5,208 in 1999) 7,284 7,343 ___________________________________________________________________________ 1,084,864 1,055,256 Treasury stock at cost, 5,766,122 and 5,760,854 shares, respectively (136,978) (136,779) ___________________________________________________________________________ Total shareholders' equity 947,886 918,477 ___________________________________________________________________________ $ 1,085,904 $ 1,058,221 =========================================================================== See accompanying notes to consolidated financial statements. 8 WEIS MARKETS, INC. Consolidated Statements of Income (dollars in thousands, except per share amounts) For the Fiscal Years Ended December 30, 2000, December 25, 1999 and December 26, 1998 2000 1999 1998 __________________________________________________________________________ Net sales $ 2,060,976 $ 2,004,947 $ 1,867,492 Cost of sales, including warehousing and distribution expenses 1,518,113 1,496,375 1,396,795 __________________________________________________________________________ Gross profit on sales 542,863 508,572 470,697 Operating, general and administrative expenses 462,780 415,537 394,271 __________________________________________________________________________ Income from operations 80,083 93,035 76,426 Investment income 18,557 19,892 47,388 Other income 18,172 11,088 10,684 __________________________________________________________________________ Income before provision for income taxes 116,812 124,015 134,498 Provision for income taxes 42,989 44,290 50,815 __________________________________________________________________________ Net income $ 73,823 $ 79,725 $ 83,683 ========================================================================== Weighted-average shares outstanding 41,695,347 41,718,188 41,775,991 Cash dividends per share $ 1.06 $ 1.02 $ .98 Basic and diluted earnings per share $ 1.77 $ 1.91 $ 2.00 ========================================================================== See accompanying notes to consolidated financial statements. 9
WEIS MARKETS, INC. Consolidated Statements of Shareholders' Equity (dollars in thousands) Accumulated For the Fiscal Years Other Total Ended December 30, 2000, Common Retained Comprehensive Treasury Shareholders' December 25, 1999 and Stock Earnings Income Stock Equity December 26, 1998 Balance at December 27, 1997 $ 7,420 $ 960,419 $ 13,278 $ (133,784) $ 847,333 Net income - 83,683 - - 83,683 Other comprehensive income - - 1,158 - 1,158 _______ Comprehensive income 84,841 _______ Shares issued for options (2,000 shares) 51 - - - 51 Treasury stock purchased (18,263 shares) - - - (652) (652) Dividends paid - (40,932) - - (40,932) ______________________________________________________________________________________________________________________ Balance at December 26, 1998 7,471 1,003,170 14,436 (134,436) 890,641 Net income - 79,725 - - 79,725 Other comprehensive income - - (7,093) - (7,093) _______ Comprehensive income 72,632 _______ Shares issued for options (3,300 shares) 88 - - - 88 Treasury stock purchased (67,269 shares) - - - (2,343) (2,343) Dividends paid - (42,541) - - (42,541) ______________________________________________________________________________________________________________________ Balance at December 25, 1999 7,559 1,040,354 7,343 (136,779) 918,477 Net income - 73,823 - - 73,823 Other comprehensive income - - (59) - (59) _______ Comprehensive income 73,764 _______ Shares issued for options (1,250 shares) 35 - - - 35 Treasury stock purchased (5,268 shares) - - - (199) (199) Dividends paid - (44,191) - - (44,191) ______________________________________________________________________________________________________________________ Balance at December 30, 2000 $ 7,594 $ 1,069,986 $ 7,284 $ (136,978) $ 947,886 ====================================================================================================================== See accompanying notes to consolidated financial statements.
10 WEIS MARKETS, INC. Consolidated Statements of Cash Flows (dollars in thousands) For the Fiscal Years Ended December 30, 2000, December 25, 1999 and December 26, 1998 2000 1999 1998 ______________________________________________________________________________ Cash flows from operating activities: Net income $ 73,823 $ 79,725 $ 83,683 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 44,169 41,097 38,769 Amortization 6,682 5,179 7,547 (Gain) loss on sale of fixed assets (5,913) (525) 1,136 Gain on sale of other assets - (3,413) - Gain on sale of marketable securities (1,279) (123) (30,394) Changes in operating assets and liabilities: (Increase) decrease in inventories (1,395) (8,208) 2,887 (Increase) decrease in accounts receivable and prepaid expenses 8,508 (2,695) (956) (Increase) decrease in income taxes recoverable 1,194 (4,338) - Increase (decrease) in accounts payable and other liabilities (2,696) 11,399 11,351 Increase (decrease) in income taxes payable - (6,421) 2,452 Increase (decrease) in deferred income taxes 2,472 209 (916) ______________________________________________________________________________ Net cash provided by operating activities 125,565 111,886 115,559 ______________________________________________________________________________ Cash flows from investing activities: Purchase of property and equipment (56,331) (86,660) (76,964) Proceeds from the sale of property and equipment 11,714 1,641 433 Proceeds from the sale of other assets - 8,012 - Purchase of marketable securities (259,574) (62,565) (134,380) Proceeds from maturities of marketable securities 108,154 69,479 100,503 Proceeds from sale of marketable securities 127,043 125 44,326 Increase in intangible and other assets (13,379) - (3,647) ______________________________________________________________________________ Net cash used in investing activities (82,373) (69,968) (69,729) ______________________________________________________________________________ Cash flows from financing activities: Proceeds from issuance of common stock 35 88 51 Dividends paid (44,191) (42,541) (40,932) Purchase of treasury stock (199) (2,343) (652) ______________________________________________________________________________ Net cash used in financing activities (44,355) (44,796) (41,533) ______________________________________________________________________________ Net increase (decrease) in cash (1,163) (2,878) 4,297 Cash at beginning of year 4,552 7,430 3,133 ______________________________________________________________________________ Cash at end of year $ 3,389 $ 4,552 $ 7,430 ============================================================================== See accompanying notes to consolidated financial statements. 11 WEIS MARKETS, INC. Notes to Consolidated Financial Statements Note 1 Summary of Significant Accounting Policies The following is a summary of the significant accounting policies utilized in preparing the company's consolidated financial statements: (a) Description of Business Weis Markets, Inc. is a Pennsylvania business corporation formed in 1924. The company is engaged principally in the retail sale of food and pet supplies in Pennsylvania and surrounding states. There was no material change in the nature of the company's business during fiscal 2000. (b) Definition of Fiscal Year The company's fiscal year ends on the last Saturday in December. Fiscal 2000, 1999 and 1998 were comprised of 53 weeks, 52 weeks and 52 weeks, respectively. (c) Principles of Consolidation The consolidated financial statements include the accounts of the company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. (d) Marketable Securities Marketable securities consist of Pennsylvania tax-free state and municipal bonds, U.S. Treasury securities, U.S. Government federal agency notes, equity securities and other short-term investments. By policy, the company invests primarily in high-grade marketable securities. The company classifies all of its marketable securities as available-for-sale. Available-for-sale securities are recorded at fair value as determined by quoted market price. Unrealized holding gains and losses, net of the related tax effect, are excluded from earnings and are reported as a separate component of shareholders' equity until realized. A decline in the market 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. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of securities. (e) Inventories Inventories are valued at the lower of cost or market, using both the last- in, first-out (LIFO) and average cost methods. (f) Property and Equipment Property and equipment are carried at cost. Depreciation is provided on the cost of buildings and improvements and equipment principally using accelerated methods. Leasehold improvements are amortized over the terms of the leases or the useful lives of the assets, whichever is shorter. Maintenance and repairs are expensed and renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the assets and accumulated depreciation are removed from the respective accounts and any profit or loss on the disposition is credited or charged to income. (g) Intangible Assets Intangible assets are generally amortized over periods ranging from 15 to 40 years. 12 WEIS MARKETS, INC. (h) Insurance Programs The company maintains self-insurance programs for the majority of its employee health care benefits and workers compensation claims. Self- insurance costs are accrued based upon the aggregate of the liability for reported claims and an estimated liability for claims incurred but not reported. The company is liable for employee 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 $0 to $250,000. (i) Incentive Plans The company has elected to follow the Accounting Principles Board's Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related Interpretations in accounting for its employee stock options because the alternative fair value accounting provided for under FASB Statement No. 123, "Accounting for Stock-Based Compensation," (Statement No. 123) requires use of option valuation models that were not developed for use in valuing employee stock options. The effect of applying Statement No. 123's fair value method to the company's stock-based awards results in pro-forma net income and earnings per share that are not materially different from amounts reported. (j) Income Taxes Under the asset and liability method of the FASB Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109), deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. (k) Revenue Recognition Revenues from the sale of products to the company's customers are recognized at the point of sale. (l) Advertising Costs The company expenses advertising costs as incurred. The company recorded advertising expense of $25.4 million in 2000, $22.9 million in 1999 and $22.3 million in 1998. (m) Earnings Per Share Basic and diluted earnings per share are the same amounts for all periods presented. (n) Use of Estimates Management of the company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (o) Reclassifications Certain amounts in the 1999 and 1998 financial statements have been reclassified to conform to the current year presentation. 13 WEIS MARKETS, INC. Note 2 Marketable Securities Marketable securities, as of December 30, 2000 and December 25, 1999, consisted of: Gross Gross Unrealized Unrealized (dollars in thousands) Amortized Holding Holding Fair December 30, 2000 Cost Gains Losses Value _________________________________________________________________________ Available-for-sale: Pennsylvania state and municipal bonds $ 145,075 $ 90 $ 884 $ 144,281 U.S. Treasury securities 1,022 8 - 1,030 U.S. Government federal agency notes 247,094 - - 247,094 Equity securities 3,131 13,236 - 16,367 Other short-term investments 1,446 - - 1,446 _________________________________________________________________________ $ 397,768 $ 13,334 $ 884 $ 410,218 ========================================================================== Gross Gross Unrealized Unrealized (dollars in thousands) Amortized Holding Holding Fair December 25, 1999 Cost Gains Losses Value _________________________________________________________________________ Available-for-sale: Pennsylvania state and municipal bonds $ 353,511 $ 140 $ 3,448 $ 350,203 U.S. Treasury securities 1,022 - 21 1,001 Equity securities 5,262 15,950 70 21,142 Other short-term investments 12,317 - - 12,317 _________________________________________________________________________ $ 372,112 $ 16,090 $ 3,539 $ 384,663 ========================================================================= Maturities of marketable securities classified as available-for-sale at December 30, 2000, were as follows: Amortized Fair (dollars in thousands) Cost Value _________________________________________________________________________ Available-for-sale: Due within one year $ 301,464 $ 301,465 Due after one year through five years 93,173 92,386 Equity securities 3,131 16,367 _________________________________________________________________________ $ 397,768 $ 410,218 ========================================================================= See additional disclosures regarding marketable securities in notes 1(d) and 11. Note 3 Inventories Merchandise inventories, as of December 30, 2000 and December 25, 1999, were valued as follows: (dollars in thousands) 2000 1999 _____________________________________________________________________ LIFO $ 135,632 $ 128,237 Average cost 32,909 38,909 _____________________________________________________________________ $ 168,541 $ 167,146 ===================================================================== If all inventories were valued on the average cost method, which approximates current cost, total inventories would have been $42,908,000 and $43,499,000 higher than as reported on the above methods as of December 30, 2000 and December 25, 1999, respectively. 14 WEIS MARKETS, INC. Although management believes the use of the LIFO method for valuing certain inventories (as set forth above) represents the most appropriate matching of costs and revenues in the company's circumstances, the following summary of net income and per share amounts based on the use of the average cost method for valuing all inventories is presented for comparative purposes. (dollars in thousands, except per share amounts) 2000 1999 1998 ____________________________________________________________________ Net income $ 73,477 $ 79,368 $ 83,732 Basic and diluted earnings per share $ 1.76 $ 1.90 $ 2.00 ==================================================================== Note 4 Property and Equipment Property and equipment, as of December 30, 2000 and December 25, 1999, consisted of: Useful Life (dollars in thousands) (in years) 2000 1999 ______________________________________________________________________ Land $ 63,341 $ 63,732 Buildings and improvements 10-60 312,462 310,137 Equipment 3-12 462,079 441,771 Leasehold improvements 5-20 97,310 81,133 ______________________________________________________________________ Total, at cost 935,192 896,773 Less accumulated depreciation and amortization 493,373 457,355 ______________________________________________________________________ $ 441,819 $ 439,418 ====================================================================== Note 5 Lease Commitments At December 30, 2000, the company leased approximately 59% of its open store facilities under operating leases that expire at various dates up to 2024. These leases generally provide for fixed annual rentals; however, several provide for minimum annual rentals plus contingent rentals as a percentage of annual sales and a number of leases require the company to pay for all or a portion of insurance, real estate taxes, water and sewer rentals, and repairs, the cost of which is charged to the related expense category rather than being accounted for as rent expense. Most of the leases contain multiple renewal options, under which the company may extend the lease terms from 5 to 20 years. Rent expense on all leases consisted of: (dollars in thousands) 2000 1999 1998 ______________________________________________________________________ Minimum annual rentals $ 27,685 $ 25,794 $ 24,294 Contingent rentals 297 286 245 ______________________________________________________________________ $ 27,982 $ 26,080 $ 24,539 ====================================================================== The following is a schedule by year of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 30, 2000. (dollars in thousands) _____________________________________________________________________ 2001 $ 29,550 2002 28,439 2003 27,534 2004 26,109 2005 23,040 Thereafter 171,711 _____________________________________________________________________ $ 306,383 ===================================================================== 15 WEIS MARKETS, INC. The company has $1,545,000 accrued for future minimum rental payments due on previously closed stores, reduced by the estimated sub-rental income to be received. The future minimum rental payments required under operating leases for these locations are included in the above schedule. As of December 30, 2000, the future minimum rentals to be received under non-cancelable leases and subleases were $6,195,000. Note 6 Retirement Plans The company has a contributory retirement savings plan (401(k)) covering substantially all full-time employees, a noncontributory profit-sharing plan covering eligible employees, a noncontributory employee stock bonus plan covering eligible employees and two supplemental retirement plans covering certain officers of the company. An eligible employee as defined in the Weis Markets, Inc. Profit Sharing Plan includes salaried employees, store management and administrative support personnel. The company's policy is to fund 401(k), profit-sharing and stock bonus costs accrued, but not supplemental retirement costs. Contributions to the 401(k) plan, the profit-sharing plan and the stock bonus plan are made at the sole discretion of the company. The company's supplemental retirement plans provide for the payment of specific amounts of annual retirement benefits to the officers or to their beneficiaries over an actuarially computed normal life expectancy. The actuarial present value of accumulated benefits amounted to $7,536,000 and $7,197,000 at December 30, 2000 and December 25, 1999, respectively. Plan costs are based upon the deferral of retirement rather than upon future service and all benefits are fully vested. Retirement plan costs amounted to: (dollars in thousands) 2000 1999 1998 ________________________________________________________________________ Pension plan $ - $ - $ (329) Retirement savings plan 945 907 899 Profit-sharing plan 850 850 815 Employee stock bonus plan 40 40 40 Supplemental retirement plans 617 600 655 ________________________________________________________________________ $ 2,452 $ 2,397 $ 2,080 ======================================================================== The company has no other post-retirement benefit plans. 16 WEIS MARKETS, INC. Note 7 Incentive Plans (a) Stock Option Plan The company has an incentive stock option plan for officers and other key employees under which 196,789 shares of common stock are reserved for issuance at December 30, 2000. Under the terms of the plan, option prices are 100% of the "fair market value" of the shares on the date granted. Options granted are immediately exercisable and expire ten years after date of grant. Changes during the three years ended December 30, 2000, in options outstanding under the plan were as follows: Weighted-Average Shares Exercise Price Under Option _____________________________________________________________________________ Balance, December 27, 1997 $29.82 46,590 Granted $34.31 15,478 Exercised $25.44 (2,000) Forfeited $29.03 (450) _____________________________________________________________________________ Balance, December 26, 1998 $31.14 59,618 Granted $37.53 41,761 Exercised $26.79 (3,300) Forfeited $31.46 (12,359) _____________________________________________________________________________ Balance, December 25, 1999 $34.37 85,720 Granted $35.13 35,450 Exercised $27.30 (1,250) Forfeited $33.53 (3,400) _____________________________________________________________________________ Balance, December 30, 2000 $34.70 116,520 ============================================================================= Exercise prices for options outstanding as of December 30, 2000 ranged from $26.25 to $37.94. The weighted-average remaining contractual life of those options is 6.4 years. As of December 30, 2000, all options are exercisable. (b) Company Appreciation Plan Under the company appreciation plan, officers and other employees are awarded rights equivalent to shares of company common stock. At the maturity date, usually one year after the date of award, the value of any appreciation from the original date of issue is paid in cash to the participants. During 2000, 1999 and 1998, 56,750, 55,200 and 43,600 rights, respectively, were awarded under the program. In 2000, earnings were credited $95,000, while in 1999 and 1998, earnings were charged $295,000 and $152,000, respectively. Note 8 Income Taxes The provision for income taxes consists of: (dollars in thousands) 2000 1999 1998 ________________________________________________________________________ Currently payable: Federal $ 31,367 $ 31,998 $ 40,829 State 9,150 12,083 13,450 Deferred: Federal 2,151 1,546 (3,408) State 321 (1,337) (56) ________________________________________________________________________ $ 42,989 $ 44,290 $ 50,815 ======================================================================== 17 WEIS MARKETS, INC. The following is a reconciliation between the applicable income tax expense and the amount of income taxes that would have been provided at the Federal statutory rate. The statutory rate was 35% in 2000, 1999 and 1998. (dollars in thousands) 2000 1999 1998 ________________________________________________________________________ Tax at statutory rate $ 40,884 $ 43,405 $ 47,074 State income taxes, net of federal income tax benefit 5,204 7,282 8,951 Other - principally tax-exempt investment income (3,099) (6,397) (5,210) ________________________________________________________________________ Actual provision (effective tax rate 36.8%, 35.7% and 37.8%, respectively) $ 42,989 $ 44,290 $ 50,815 ======================================================================== Cash paid for income taxes was $39,729,000, $52,809,000 and $49,353,000 in 2000, 1999 and 1998, respectively. The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 30, 2000 and December 25, 1999, are presented below: (dollars in thousands) 2000 1999 _____________________________________________________________________ Deferred tax assets: Accounts receivable $ 858 $ 1,236 Compensated absences 692 666 Employee benefit plans 4,606 3,726 General liability insurance 1,178 2,341 Litigation settlement 2,033 - Nondeductible accruals and other 306 633 _____________________________________________________________________ Total deferred tax assets 9,673 8,602 _____________________________________________________________________ Deferred tax liabilities: Inventories (6,650) (1,934) Unrealized gain on marketable securities (5,166) (5,208) Depreciation (17,731) (18,904) _____________________________________________________________________ Total deferred tax liabilities (29,547) (26,046) _____________________________________________________________________ Net deferred tax liability $ (19,874) $ (17,444) _____________________________________________________________________ Current deferred asset (liability) - net $ (2,143) $ 1,460 Noncurrent deferred liability - net (17,731) (18,904) _____________________________________________________________________ Net deferred tax liability $ (19,874) $ (17,444) ===================================================================== Note 9 Comprehensive Income (dollars in thousands) 2000 1999 1998 ________________________________________________________________________ Net income $ 73,823 $ 79,725 $ 83,683 Other comprehensive income by component, net of tax: Unrealized holding gains (losses) arising during period(Net of deferred taxes of $488, $(5,031) and $13,432, respectively) 690 (7,093) 18,942 Reclassification adjustment for gains included in net income (Net of deferred taxes of $530, $0 and $12,610, respectively) (749) - (17,784) ________________________________________________________________________ Other comprehensive income, net of tax (59) (7,093) 1,158 ________________________________________________________________________ Comprehensive income $ 73,764 $ 72,632 $ 84,841 ======================================================================== 18 WEIS MARKETS, INC. Note 10 Summary of Quarterly Results (Unaudited) Quarterly financial data for 2000 and 1999 are as follows: Fourteen (dollars in thousands, Weeks except per share amounts) Thirteen Weeks Ended Ended Mar. 25, '00 June 24, '00 Sep. 23, '00 Dec. 30, '00 ________________________________________________________________________________ Net sales $ 519,750 $ 508,957 $ 485,875 $ 546,394 Gross profit on sales 130,063 134,878 133,326 144,596 Net income 17,878 21,658 19,103 15,184 Basic and diluted earnings per share .43 .52 .46 .36 (dollars in thousands, except per share amounts) Thirteen Weeks Ended Mar. 27, '99 June 26, '99 Sep. 25, '99 Dec. 25, '99 ________________________________________________________________________________ Net sales $ 496,281 $ 490,019 $ 492,293 $ 526,354 Gross profit on sales 125,190 124,516 128,992 129,874 Net income 21,191 19,199 19,150 20,185 Basic and diluted earnings per share .51 .46 .46 .48 On October 19, 2000, a jury determined that the company breached its lease related to the company's failure to conduct business as a supermarket at one location and awarded PVC Realty, a Pennsylvania Limited Liability Partnership, $6.5 million for lost profits and $15 million for punitive damages. The company settled this litigation with the plaintiff and recorded a $4.9 million expense in the fourth quarter of 2000. The company also spent $1.2 million during the fourth quarter of 2000 related to the ongoing examination of various options for increasing shareholder value. Note 11 Fair Value Information The carrying amounts for cash, trade receivables and trade payables approximate fair value because of the short maturities of these instruments. The fair values of the company's marketable securities, as disclosed in Note 2, are based on quoted market prices. Note 12 Acquisitions On January 17, 2000 and January 31, 2000, the company acquired two stores located in central Pennsylvania and two stores in Maryland from Fleming Food Companies, Inc. On February 22, 1999, the company acquired four stores located in central Pennsylvania from Penn Traffic, Inc. On August 16, 1998, the company acquired one store, doing business as Cressler's Marketplace, located in Shippensburg, PA. These acquisitions were cash-only transactions accounted for by the purchase method. Goodwill arising from these transactions, which is not material, is being amortized over a 15-year period on a straight-line basis. Note 13 Contingencies The company is involved in various legal actions arising out of the normal course of business. 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. 19 WEIS MARKETS, INC. Report of Independent Auditors The Board of Directors and Shareholders Weis Markets, Inc. Sunbury, Pennsylvania We have audited the accompanying consolidated balance sheets of Weis Markets, Inc. as of December 30, 2000 and December 25, 1999, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 30, 2000. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Weis Markets, Inc. at December 30, 2000 and December 25, 1999, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 30, 2000, in conformity with accounting principles generally accepted in the United States. Harrisburg, PA /S/ Ernst & Young LLP February 2, 2001 20 WEIS MARKETS, INC. PART III Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure: None. Item 10. Directors and Executive Officers of the Registrant: The following is a concise statement of information concerning directors of the company, together with certain other information with respect to such directors:
Shares of Stock of the Period Company Percent of Principal Beneficially Owned of Name Age Directorship Occupation on Dec. 31, 2000 Class _________________________________________________________________________________________________ Robert F. Weis 81 1947 Chairman of the 12,758,189 30.6 to date Board & Treasurer Norman S. Rich 63 1991 President 23,373 * to date William R. Mills 44 1996 Vice President Finance 2,000 * to date & Secretary Jonathan H. Weis 33 1996 Vice President Property 88,559 * to date Management and Development Michael M. Apfelbaum 40 1996 Partner, Apfelbaum 3,806,476 9.1 to date Apfelbaum & Apfelbaum Attorneys at Law Joseph I. Goldstein 58 1995 Partner, 10,097 * to date Crowell & Moring LLP Attorneys at Law Jeffrey E. Perelman 51 2000 Chief Executive Officer 3,000 * to date JEP Management, Inc. Richard E. Shulman 61 1994 President 229 * to date Industry Systems Development Co. All 16 Directors and Officers as a Group 16,717,106 40.1 * Owns less than 1% of class.
Robert F. Weis. The company has employed Mr. Weis since 1946. Mr. Weis served as Vice President-Treasurer from 1961 through August of 1994 at which time he was appointed Co-Chairman & Treasurer. In January of 1995, Mr. Weis was appointed Chairman & Treasurer. Robert F. Weis is the father of Director, Jonathan H. Weis, and brother of Ellen W. P. Wasserman who is also a beneficial owner of more than 5% of the company's Common Stock. Mr. Weis has been a member of the Board of Directors since 1947. Mr. Weis also serves as a member of the Board of Trustees of the Sunbury Community Hospital. 21 WEIS MARKETS, INC. Norman S. Rich. The company has employed Mr. Rich since 1964. Mr. Rich served as Vice President-Store Operations from 1980 until April 1992, when he became Vice President-Secretary of the company. During the year 1994, Mr. Rich became President of the company. Mr. Rich has been a member of the Board of Directors since 1991. Mr. Rich also serves on the Board of Trustees of Evangelical Community Hospital and as a Director of the Food Marketing Institute. William R. Mills. The company has employed Mr. Mills since 1992. Mr. Mills served as Vice President Finance from 1992 through January 1995, at which time he became Vice President Finance & Secretary of the company. Mr. Mills has been a member of the Board of Directors since 1996. Jonathan H. Weis. The company has employed Mr. Weis since 1989. Mr. Weis served the company in various capacities, including Director of Property Management and Development, until July 1996, at which time he was appointed as Vice President Property Management and Development. Jonathan H. Weis is the son of Director, Robert F. Weis. Mr. Weis has been a member of the Board of Directors since 1996. Michael M. Apfelbaum. Mr. Apfelbaum is engaged in the private practice of law as a Partner with the firm of Apfelbaum, Apfelbaum & Apfelbaum. Mr. Apfelbaum serves as Co-Counsel for the Charles B. Degenstein Foundation and as City Solicitor to the City of Sunbury. Mr. Apfelbaum has been a member of the Board of Directors since 1996. Joseph I. Goldstein. Mr. Goldstein is engaged in the private practice of law as a Partner with the firm of Crowell & Moring LLP, Washington, D.C. Prior to rejoining Crowell & Moring during January of 2001, Mr. Goldstein was a partner of Kirkpatrick and Lockhart LLP from October 1999 to January 2001. Mr. Goldstein was a Partner of Crowell & Moring from April 1995 to October 1999. Prior to joining Crowell & Moring in 1995, Mr. Goldstein was an Associate Director of the Division of Enforcement, United States Securities and Exchange Commission. Mr. Goldstein has been a member of the Board of Directors since 1995. Mr. Goldstein is married to Ellen Weis Goldstein, is the son-in-law of Janet C. Weis, brother-in-law of Susan Weis Mindel and brother-in-law of Nancy Weis Wender; each of whom are beneficial owners of more than 5% of the company's Common Stock. Jeffrey E. Perelman. Mr. Perelman serves as Chief Executive Officer of: DentalEZ Group, Columbia Dentoform, Schiller-Pfeiffer, Inc., Newton Tool & Mfg. Company, General Machine Corporation, United Ammunition Container, JEP Management, Inc., Den-Tal-EZ Alabama, Inc. and Mantis Europe, Inc. Mr. Perelman is also active in various philanthropic endeavors. Mr. Perelman has been a member of the Board of Directors since 2000. Richard E. Shulman. Mr. Shulman serves as President of Industry Systems Development, Co., a consulting firm. He has expertise in the business of supermarket chains, food wholesalers and technology companies. Mr. Shulman has been a member of the Board of Directors since 1994. Item 11. Executive Compensation: BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Executive Compensation Committee of the Board of Directors believes that the primary objective of the company's executive compensation policies should be to attract and retain qualified executives, which is critical to the on-going success of the company. The executive compensation program is based upon factors that are subjective in nature and are in the best interests of the company and ultimately the shareholders. The Committee's primary objective is achieved by providing appropriate compensation and incentives that are competitive with executives at selected peer companies of comparable size and position in the retail business, while keeping compensation in line with the financial objectives of the company. The Committee recognizes the fact that the company is engaged in a highly competitive industry and thus annually examines market compensation levels and trends in the labor market. The Committee has retained a consulting firm that specializes in executive compensation issues. Based upon their recommendations, the Committee is in the process of revising the company's compensation program. 22 WEIS MARKETS, INC. The Committee, through a review process with the President's written evaluation of executives other than the Chairman and the President, subjectively evaluates the performance of senior management. The reports include a review of each executive's performance for the most recent fiscal year. In addition, senior management is orally evaluated by the President as to their efforts and accomplishments throughout the period from information deemed relevant both internally and in light of the competitive position of the company in the industry. These evaluations include qualitative factors such as the individuals' decision-making responsibilities, the professional experience required to perform given tasks, and their leadership and team-building skills. Although executive compensation is not specifically related to corporate performance, the overall performance of the company is a consideration in determining executive compensation. The Chairman and President reported that the executives substantially met their objectives during the most recent fiscal year. The Committee determined the President's compensation based on subjective and qualitative considerations, which include the overall financial and operational success of the company and also approved the continuation of the Chairman's compensation. Employment and Severance Agreements. The Committee notes that the President and Vice President Finance & Secretary have employment agreements with the company. These agreements specify the terms of employment, including pay factors through the year 2004. In December 1999, the company entered into two year retention/severance agreements with the Vice President Private Label and nine other key company executives, excluding employee members of the Board. The agreements provide that employment shall be at will, but if employment is terminated without cause, or the officer resigns for good reason, the officer shall receive his remaining salary and all benefits payable under the agreement. The agreements include a covenant not to compete clause, which is limited by time and geography. Respectfully submitted by the Executive Compensation Committee, Richard E. Shulman, Committee Chairman Michael M. Apfelbaum Joseph I. Goldstein Jeffrey E. Perelman Jonathan H. Weis Executive Compensation - The following table sets forth, with respect to the last three completed fiscal years, the compensation of the current Chairman of the Board & Treasurer, the President of the company and the next three highest compensated executive officers of the company in 2000. The determination as to which executive officers to include in the table are based upon total annual salary and bonus exceeding $100,000 in the last completed fiscal year.
SUMMARY COMPENSATION TABLE Long Term Compensation Annual Compensation Awards ___________________________________ __________ Securities Other Annual Underlying All Other Name and Principal Salary Bonus Compensation Options / Compensation Position Year ($) ($) ($) SARs (#) ($) _____________________________________________________________________________________________________________ Robert F. Weis 2000 500,000 -- -- -- / -- 4,591 Chairman of the 1999 500,000 -- -- -- / -- 4,600 Board & Treasurer 1998 500,000 -- -- -- / -- 4,821 Norman S. Rich 2000 450,000 6,750 -- 20,000/10,000 35,651 President 1999 410,000 6,150 25,781 27,211/10,000 36,127 1998 380,000 5,700 17,833 2,789/ 7,500 26,344
23 WEIS MARKETS, INC.
SUMMARY COMPENSATION TABLE (continued) Long Term Compensation Annual Compensation Awards ___________________________________ __________ Securities Other Annual Underlying All Other Name and Principal Salary Bonus Compensation Options / Compensation Position Year ($) ($) ($) SARs (#) ($) _____________________________________________________________________________________________________________ William R. Mills 2000 198,000 2,970 -- 3,000/ 3,500 13,126 Vice President 1999 188,000 2,820 10,313 3,000/ 3,500 13,022 Finance & Secretary 1998 175,500 2,633 8,917 2,000/ 3,000 13,235 Robert M. Chessen 2000 155,000 7,400 -- 200/ 500 -- Vice President 1999 -- -- -- -- / -- -- Human Resources 1998 -- -- -- -- / -- -- Walter B. Bruce 2000 133,000 1,995 -- 300/ 1,500 12,031 Vice President 1999 128,000 1,920 6,875 300/ 2,000 12,237 Private Label 1998 122,583 1,839 6,242 300/ 2,000 12,217
"Other Annual Compensation" consists solely of payments on stock appreciation rights. There are no perquisites to report. "All Other Compensation" consists of the vested and non-vested benefits in the profit sharing, employee stock bonus, supplemental retirement and retirement benefit savings plans. The current year retirement amounts were estimated by outside actuaries for purposes of this report. Stock Appreciation Rights. The company maintains a Stock Appreciation Rights program for certain of its officers and other key executives. Under this program, participants are granted rights equivalent to shares of company stock. The rights expire in one year, at which time the value of any appreciation from the original date of issue is paid in cash to the participant. No stock is distributed to the participant and there are no plan provisions for reload or tax-reimbursement features. Stock Options. The company has an Incentive Stock Option Plan. Under the terms of the plan, options are granted for shares of the company's common stock based on the market value at the date of grant and may be exercised immediately. There are no plan provisions for reload or tax- reimbursement features. The following table contains all material information concerning stock options and stock appreciation rights granted to the named executives in the fiscal year ended December 30, 2000. OPTION/SAR GRANTS IN LAST FISCAL YEAR Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Individual Grants Option Terms ____________________________________________________________________________ % of Total Number of Options/SARs Securities Granted to Exercise Underlying Employees or Base Options/SARs in Fiscal Price Expiration Name Granted(#) Year ($/Share) Date 5% ($) 10% ($) ____________________________________________________________________________ Norman S. Rich 20,000/ 56.4%/ 35.1250 7/31/2010 441,799 1,119,604 10,000 17.6% 35.0000 8/01/2001 17,500 35,000 William R. Mills 3,000/ 8.5%/ 35.1250 7/31/2010 66,270 167,941 3,500 6.2% 35.0000 8/01/2001 6,125 12,250 24 WEIS MARKETS, INC. OPTION/SAR GRANTS IN LAST FISCAL YEAR (continued) Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Individual Grants Option Terms ____________________________________________________________________________ % of Total Number of Options/SARs Securities Granted to Exercise Underlying Employees or Base Options/SARs in Fiscal Price Expiration Name Granted(#) Year ($/Share) Date 5% ($) 10% ($) ____________________________________________________________________________ Robert M. Chessen 200/ .6%/ 35.1250 7/31/2010 4,418 11,196 500 .9% 35.0000 8/01/2001 875 1,750 Walter B. Bruce 300/ .8%/ 35.1250 7/31/2010 6,627 16,794 1,500 2.6% 35.0000 8/01/2001 2,625 5,250 The following table summarizes stock options and stock appreciation rights exercised during 2000 and presents the value of unexercised options and stock appreciation rights held by the named executives at fiscal year end. The closing price of the stock at the fiscal year end was $38.3125.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES Number of Securities Value of Underlying Unexercised Unexercised In-the-Money Options/SARs Options/SARs at FY-End (#) at FY-End ($) Shares Acquired Value Exercisable/ Exercisable/ Name Type on Exercise (#) Realized ($) Unexercisable Unexercisable _______________________________________________________________________________________________________ Norman S. Rich Options - - 60,570 / 0 187,866 / 0 SARs - - 0 /10,000 0 /33,125 William R. Mills Options - - 12,000 / 0 48,189 / 0 SARs - - 0 / 3,500 0 /11,594 Robert M. Chessen Options - - 200 / 0 638 / 0 SARs - - 0 / 500 0 / 1,656 Walter B. Bruce Options - - 1,200 / 0 3,900 / 0 SARs - - 0 / 1,500 0 / 4,969
RETIREMENT PLANS Profit Sharing Plan. The company maintains, at its sole expense, a Profit Sharing Plan for certain salaried employees, store management and administrative support personnel. The purpose of the Plan is to enhance employee opportunities for their dedication and loyal service to the company. The Board of Directors annually determines the amount of contribution to the Plan at its sole discretion. The contribution is allocated among the various plan participants in relationship to their compensation and years of service. Plan participants are 100% vested in their accounts after 7 years of service with the company and are entitled to receive a distribution of their vested accounts upon termination of employment, including retirement, disability or death. 25 WEIS MARKETS, INC. Employee Stock Ownership Plan. The company maintains, at its sole expense, an Employee Stock Ownership Plan for certain salaried employees. The purpose of the Employee Stock Ownership Plan is to give eligible employees the pride of ownership in the company. Eligible employees become participants at the beginning of the plan year following the two-year anniversary date of their employment, subject to break in service provisions. The Board of Directors annually determines the amount of contribution to the Plan at its sole discretion. The entire contribution is applied toward the purchase of the company's stock and is distributed among participant accounts in relationship to their compensation. Every participant is fully vested. Vested interests in plan assets are distributed to participants upon reaching the applicable retirement age. Retirement Savings Plan. The company maintains a Retirement Savings Plan pursuant to Section 401(k) of the Internal Revenue Code. Employees become eligible to participate once they complete one year of eligibility service and attain the age of 21. On a quarterly basis, the company contributes into the plan at the rate of 25% of the employees first 4% of elective deferral. Plan participants are 100% vested in their accounts after 7 years of service with the company and are entitled to receive a distribution of their vested accounts upon termination of employment, including retirement, disability or death. Supplemental Retirement Plans. The company maintains a non-qualified supplemental retirement plan for certain of its officers. The benefits are determined through actuarial calculations dependent on the age of the recipient. The benefit payable on an annual basis to Robert F. Weis would be $494,335 if he had retired as of the date of this filing. The company also maintains a second non-qualified supplemental retirement plan for certain of its employees. This Plan is designed to provide retirement benefits and salary deferral opportunities because of the limitations imposed by the Internal Revenue Code and the Regulations implemented by the Internal Revenue Service. Participants in this plan are excluded from participation in the qualified Profit Sharing or Employee Stock Ownership plans. The Board of Directors annually determines the amount of the allocation to the Plan at its sole discretion. The allocation among the various plan participants is made in relationship to their compensation, years of service and job performance. Plan participants are 100% vested in their accounts after 7 years of service with the company. Benefits are distributed among participants upon reaching the applicable retirement age. Substantial risk of benefit forfeiture does exist for participants in this Plan. COMPENSATION OF DIRECTORS AND COMMITTEES OF THE BOARD Standard Board Compensation Arrangements: With respect to fiscal 2000, all non-employee Directors received an annual retainer of $16,000, and an additional $1,000 for each regular meeting attended. The company's Board held four regular meetings and three special meetings during fiscal 2000. Messrs. Michael M. Apfelbaum, Joseph I. Goldstein and Richard E. Shulman attended all four of the regular meetings. Jeffrey E. Perelman joined the Board in June of 2000 and attended two regular meetings. All other directors attended the regular meetings without remuneration. The Audit Committee: The Audit Committee acts independently to review the scope and results of the independent auditors' engagement and reviews the adequacy of the company's internal audit and financial controls. The Committee is composed of independent directors for which information regarding the functions performed by the Committee, its membership is set forth in the "Report of the Audit Committee," to be included in the 2001 proxy filing. The Audit Committee is governed by a written charter approved by the Board of Directors. Each non-employee member of the Audit Committee receives $700 for each audit committee meeting attended. The 2000 Audit Committee of the Board of Directors was composed of Messrs. Michael M. Apfelbaum, Joseph I. Goldstein, Jeffrey E. Perelman and Richard E. Shulman. Mr. Apfelbaum served as Chairman of the Audit Committee. During fiscal 2000, Mr. Perelman attended two meetings and the other committee members attended all four meetings. 26 WEIS MARKETS, INC. The Compensation Committee: The Compensation Committee is responsible for developing policies and making recommendations about compensation of officers. The 2000 Compensation Committee of the Board of Directors was composed of Messrs. Michael M. Apfelbaum, Joseph I. Goldstein, Jeffrey E. Perelman, Richard E. Shulman and Jonathan H. Weis. Mr. Shulman served as Chairman of the Compensation Committee. Each non-employee Director of the Compensation Committee receives an annual retainer of $700 for their participation. The Compensation Committee held three meetings during the fiscal year. The Special Committee: The Special Committee was formed in fiscal 2000 by the Board of Directors to consider certain shareholder related proposals. The Committee consists of Jeffrey E. Perelman and Richard E. Shulman, both of whom are non-family affiliated and non-management directors and do not have personal involvement or a secondary interest in these proposals. The role of the Committee members includes making recommended changes to the proposals if warranted. The Committee has full authority to retain its own legal and financial counsel in order to reach a determination regarding the proposals. For their services, Messrs. Perelman and Shulman each received a flat fee of $20,000 for their participation. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The 2000 Compensation Committee of the Board of Directors was composed of Messrs. Michael M. Apfelbaum, Joseph I. Goldstein, Jeffrey E. Perelman, Richard E. Shulman and Jonathan H. Weis. Jonathan H. Weis is an officer of the company. Messrs. Apfelbaum, Goldstein, Perelman and Shulman were not officers or employees of the company or had any relationship with the company requiring disclosure under the Securities and Exchange Commission regulations. SHAREHOLDER RETURN PERFORMANCE The following line graph compares the yearly percentage change in the cumulative total shareholder return on the company's Common Stock against the cumulative total return of the S&P Composite-500 Stock Index and the cumulative total return of a published group index for the Retail Grocery Stores Industry, (Peer Group), provided by Value Line, Inc., for the period of five fiscal years. The graph depicts $100 invested at the close of trading on the last trading day preceding the first day of the fifth preceding fiscal year in Weis Markets, Inc. common stock, S&P 500, and the Peer Group. The cumulative total return assumes reinvestment of dividends. COMPARATIVE FIVE-YEAR TOTAL RETURNS (This area contains a 5-year line graph as described in the previous paragraph.) 1995 1996 1997 1998 1999 2000 Weis Markets 100.00 116.09 131.27 149.89 172.44 144.70 S&P 500 100.00 123.25 164.21 210.85 253.61 227.89 Peer Group 100.00 138.22 194.31 295.71 240.16 282.07 27 WEIS MARKETS, INC. Item 12. Security Ownership of Certain Beneficial Owners and Management: OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS The following persons are known by the company to be the beneficial owners of more than 5% of its Common Stock, which is its only class of voting securities, on December 31, 2000. Information contained in the table and in the following footnotes was derived from filings made with the Securities and Exchange Commission by the beneficial owners. Name and Address Amount and Nature Percent of of Beneficial of Beneficial Owner Ownership Class ____________________________________________________________________ Robert F. Weis 12,758,189 (1) 30.6 c/o Weis Markets, Inc. 1000 South Second Street Sunbury, PA 17801-0471 Janet C. Weis 8,159,554 (2) 19.6 43 South Fifth Street Sunbury, PA 17801-0471 Weis Family Holdings, L.P. 8,092,273 (3) 19.4 919 North Market Street, Suite 200 Wilmington, DE 19801 Weis Family Holdings, L.L.C. 8,092,273 (4) 19.4 919 North Market Street, Suite 200 Wilmington, DE 19801 Michael M. Apfelbaum 3,806,476 (5) 9.1 43 South Fifth Street Sunbury, PA 17801 Ellen W. P. Wasserman 3,281,424 (6) 7.9 c/o Weis Markets, Inc. 1000 South Second Street Sunbury, PA 17801-0471 Sidney Apfelbaum 2,498,287 (10) 6.0 43 South Fifth Street Sunbury, PA 17801 Susan Weis Mindel 2,193,327 (7) 5.3 43 South Fifth Street Sunbury, PA 17801 Ellen Weis Goldstein 2,179,452 (8) 5.2 43 South Fifth Street Sunbury, PA 17801 Nancy Weis Wender 2,083,765 (9) 5.0 43 South Fifth Street Sunbury, PA 17801 28 WEIS MARKETS, INC. Footnotes: 1. Robert F. Weis has sole voting and dispositive power as to all 12,758,189 shares listed. This amount includes 6,649,087 shares held in trust under the Will of Harry Weis, with Mellon Bank Corporation and Robert F. Weis as co-trustees. 2. Janet C. Weis has sole voting and dispositive power as to all 8,159,554 shares listed. This amount includes 8,092,273 shares held by the Weis Family Holdings, L.P. (the "Partnership"). 3. The Weis Family Holdings, L.P. is principally engaged in holding shares of Common Stock of the company. The Weis Family Holdings, L.L.C. is the sole general partner of the Partnership and has sole voting and dispositive power as to all assets held in the Partnership. 4. The Weis Family Holdings, L.L.C. (the "L.L.C.") is the sole general partner of the Weis Family Holdings, L.P. and is principally engaged in managing the affairs of that partnership. Janet C. Weis is the sole Manager of the L.L.C. Janet C. Weis has a 52% interest in the L.L.C., Susan Weis Mindel, Ellen Weis Goldstein and Nancy Weis Wender each have a 16% interest in the L.L.C. Janet C. Weis has sole voting and dispositive power as to all shares listed. 5. Michael M. Apfelbaum has sole voting power as to 24,447 shares, shared voting power as to 3,782,029 shares, sole dispositive power as to 88 shares and shared dispositive power as to 3,782,029. Of the aggregate amount listed, Mr. Apfelbaum shares voting and dispositive powers as to 1,259,148 shares with Susan Weis Mindel, 1,259,149 shares with Ellen Weis Goldstein, and 1,259,148 shares with Nancy Weis Wender as co-trustees in trusts under the Claire Gross Weis Deed of Trust (the "Claire Weis Trusts") held at Mellon Bank Corporation. Mr. Apfelbaum also shares voting and dispositive power as to 1,590 shares with Ellen Weis Goldstein as co-trustees of certain trusts for the benefit of Mrs. Goldstein's children. 6. Ellen W. P. Wasserman has sole voting and dispositive power as to all 3,281,424 shares listed. 7. Susan Weis Mindel has sole voting and dispositive power as to 728,051 shares. Mrs. Mindel shares voting and dispositive power as to 93,124 shares with Nancy Weis Wender and Ellen Weis Goldstein as co-trustees of the Janet Weis Trusts, shares voting and dispositive power as to 113,004 shares with her children as co-trustee of certain trusts for the benefit of such children, and shares voting and dispositive power as to 1,259,148 shares with Michael Apfelbaum as co-trustees of one of the Claire Weis Trusts. 8. Ellen Weis Goldstein has sole voting and dispositive power as to 743,209 shares. Mrs. Goldstein shares voting and dispositive power as to 93,124 shares with Susan Weis Mindel and Nancy Weis Wender as co-trustees of the Janet Weis Trusts, shares voting and dispositive power over 4,555 shares with Joseph I. Goldstein, shares voting and dispositive power as to 77,825 shares with her children as co-trustee of certain trusts for the benefit of such children, shares voting and dispositive power as to 1,259,149 shares with Michael Apfelbaum as co-trustees of one of the Claire Weis Trusts, and shares voting and dispositive power as to 1,590 shares with Michael Apfelbaum as co-trustees of certain trusts for the benefit of her children. 9. Nancy Weis Wender has sole voting and dispositive power as to 731,493 shares. Ms. Wender shares voting and dispositive power as to 93,124 shares with Susan Weis Mindel and Ellen Weis Goldstein as co-trustees of the Janet Weis Trusts, and shares voting and dispositive power as to 1,259,148 shares with Michael Apfelbaum as co-trustees of one of the Claire Weis Trusts. 10. Sidney Apfelbaum has sole voting and dispositive power as to 2,308,526 shares held in the Charles B. Degenstein Foundation Charitable Deed of Trust at Mellon Bank Corporation. Mr. Apfelbaum shares voting and dispositive power as to 18,000 shares with Mellon Financial Corporation, Mellon Bank, N.A. and Walter Zweifler as co-trustees of the Zweifler Family Trusts, shares voting and dispositive power as to 147,614 shares with Mellon Financial Corporation, Mellon Bank, N.A. and Lore Degenstein as co-trustees of the Lore Degenstein Trusts, and shares dispositive power as to 24,147 shares with his wife. 29 WEIS MARKETS, INC. Item 13. Certain Relationships and Related Transactions: Other Arrangements: Central Properties, Inc., a Pennsylvania corporation ("Central Properties"), owns the land under a Company store and an adjacent parking lot in Lebanon, Pennsylvania. Central Properties leased these properties to the Company for $80,149 in 2000. The stockholders of Central Properties include Michael M. Apfelbaum and certain of his family members, certain members of Joseph I. Goldstein's family, Jonathan H. Weis and Robert F. Weis, each of whom is a director of the Company. Central Properties intends to covey a building and parcel of land located in Camp Hill, Pennsylvania to the company for consideration of $950,000 plus associated closing costs. The transaction is expected to be completed on or before July 13, 2001. The proposed transaction was negotiated by employees of the company who were independent of Central Properties and by counsel for Central Properties who was independent of Weis Markets. The company intends to expand a store location after the transaction and have full ownership of the adjacent parking lot. PART IV Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K: (a) See Part II Item 8 "Financial Statements and Supplementary Data" contained within this document. (b) There were no reports on Form 8-K filed during the quarter ended December 30, 2000. (c) A listing of exhibits filed or incorporated by reference is as follows: Exhibit No. 3-A Articles of Incorporation 3-B By-Laws 3-C Amendments to the By-Laws 10-A Profit Sharing Plan 10-B Stock Bonus Plan 10-C Company Appreciation Plan 10-D Stock Option Plan 10-E Supplemental Employee Retirement Plan 10-F Executive Employment Contract 21 Subsidiaries of the Registrant Exhibits 3-A and 3-B have been filed as exhibits under Part IV, Item 14(c) in Form 10-K for the fiscal year ended December 27, 1980 and are incorporated herein by reference. Exhibit 3-C has been filed as an 8-K on January 27, 1998 and is herein incorporated by reference. Exhibits 10-A, 10-B, 10-C, 10-E and 10-F, have been filed as exhibits under Part IV, Item 14(c) in Form 10-K for the fiscal year ended December 31, 1994 and are incorporated herein by reference. Exhibit 10-D has been filed as an exhibit under Part IV, Item 14(c) in Form 10-K for the fiscal year ended December 26, 1998 and is incorporated herein by reference. The foregoing exhibits are available upon request from the Secretary of the company at a fee of $10.00 per copy. 30 WEIS MARKETS, INC. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 03/30/2000 /S/ Robert F. Weis _______________ ___________________________________ Robert F. Weis Chairman of the Board of Directors, and Treasurer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Date 03/30/2000 /S/ Robert F. Weis _______________ ___________________________________ Robert F. Weis (Principal Financial Officer) Chairman of the Board of Directors, and Treasurer and Director Date 03/30/2000 /S/ Norman S. Rich _______________ ___________________________________ Norman S. Rich (Principal Executive Officer) President and Director Date 03/30/2000 /S/ William R. Mills _______________ ___________________________________ William R. Mills Vice President Finance, Secretary and Director 31 EXHIBIT 21 WEIS MARKETS, INC. SUBSIDIARIES OF THE REGISTRANT Percent State of Owned by Incorporation Registrant __________________________ Albany Public Markets, Inc. New York 100% Dutch Valley Food Company, Inc. Pennsylvania 100% King's Supermarkets, Inc. Pennsylvania 100% Martin's Farm Market, Inc. Pennsylvania 100% Shamrock Wholesale Distributors, Inc. Pennsylvania 100% SuperPetz II, Inc. Pennsylvania 100% The consolidated financial statements include the accounts of the company and its subsidiaries. 32 -----END PRIVACY-ENHANCED MESSAGE-----