10-K 1 wmk10k2001.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 29, 2001 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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. The aggregate market value of Common Stock held by non-affiliates of the Registrant is approximately $396,014,000. Shares of common stock outstanding as of February 20, 2002 - 27,203,707. The index to Exhibits is located in Part IV, Item 14(c). DOCUMENTS INCORPORATED BY REFERENCE: Selected portions of the Weis Markets, Inc. definitive proxy statement dated March 8, 2002 are incorporated by reference in Part III of this Form 10-K. 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 2001. (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 132 retail food markets in Pennsylvania, 23 in Maryland, 4 in New Jersey, 2 in New York, 1 in Virginia, and 1 in West Virginia. The stores trade under the name Weis Markets, except for 18 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, 2 new stores were opened. One store was closed for financial reasons and 1 store was closed and is in the process of being rebuilt. 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, 1 store in North Carolina, 7 stores in Pennsylvania, 5 stores in South Carolina, and 4 stores in Tennessee. 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 29, 2001 was: Year Grocery Meat Produce Pharmacy Pet Supply Other 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 2001 57.28 15.41 12.84 8.82 3.23 2.42 (c)(1)(vi) The company has its own distribution centers 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 19,000 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 pending legal proceedings, other than routine litigation incidental to the business. 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 2001. 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 29, 2001 as provided by the company's transfer agent was 5,983. The following table sets forth, for the periods indicated, the high and low stock prices for the company's common stock as reported by NYSE and the dividends paid per share. 2001 2000 Stock Price Dividend Stock Price Dividend Quarter High Low Per Share High Low Per Share First $ 38.25 $ 32.48 $ .27 $ 45.25 $ 34.19 $ .26 Second 35.70 31.45 .27 35.81 32.00 .26 Third 35.30 25.80 .27 37.13 32.44 .27 Fourth 29.76 26.52 .27 42.75 34.31 .27 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 in Item 7. 3
Weis Markets, Inc. Five Year Review of Operations 52 Weeks 53 Weeks 52 Weeks 52 Weeks 52 Weeks (dollars in thousands, Ended Ended Ended Ended Ended except per share amounts) Dec. 29, 2001 Dec. 30, 2000 Dec. 25, 1999 Dec. 26, 1998 Dec. 27, 1997 Net sales $ 1,988,246 $ 2,060,976 $ 2,004,947 $ 1,867,492 $ 1,818,816 Costs and expenses 1,925,306 1,980,893 1,911,912 1,791,066 1,733,686 _________________________________________________________________________________________________________ Income from operations 62,940 80,083 93,035 76,426 85,130 Other income and expense 18,907 36,729 30,980 58,072 33,452 _________________________________________________________________________________________________________ Income before provision for income taxes 81,847 116,812 124,015 134,498 118,582 Provision for income taxes 31,792 42,989 44,290 50,815 40,388 _________________________________________________________________________________________________________ Net income 50,055 73,823 79,725 83,683 78,194 Retained earnings, beginning of year 1,069,986 1,040,354 1,003,170 960,419 921,572 _________________________________________________________________________________________________________ 1,120,041 1,114,177 1,082,895 1,044,102 999,766 Stock purchase and cancellation 434,317 --- --- --- --- Cash dividends 37,202 44,191 42,541 40,932 39,347 _________________________________________________________________________________________________________ Retained earnings, end of year $ 648,522 $ 1,069,986 $ 1,040,354 $ 1,003,170 $ 960,419 _________________________________________________________________________________________________________ Weighted-average shares outstanding 32,298,696 41,695,347 41,718,188 41,775,991 41,842,583 _________________________________________________________________________________________________________ Cash dividends per share $ 1.08 $ 1.06 $ 1.02 $ .98 $ .94 _________________________________________________________________________________________________________ Basic and diluted earnings per share $ 1.55 $ 1.77 $ 1.91 $ 2.00 $ 1.87 _________________________________________________________________________________________________________ Working capital $ 102,331 $ 496,906 $ 481,728 $ 489,475 $ 471,562 Total assets $ 704,185 $ 1,085,904 $ 1,058,221 $ 1,029,202 $ 971,752 Long-term obligations $ 25,000 $ --- $ --- $ --- $ --- Shareholders' equity $ 525,364 $ 947,886 $ 918,477 $ 890,641 $ 847,333 Number of grocery stores 163 163 163 158 154 Number of pet supply stores 33 33 34 36 43 4
Weis Markets, Inc. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: Results of Operations Sales of $1.988 billion generated during the 52-week fiscal year ended December 29, 2001 compared to sales of $2.061 billion in the 53 weeks of fiscal 2000 and $2.005 billion in the 52 weeks of fiscal 1999. These sales amounts reflect a decrease of 3.5% in fiscal 2001 compared to 2000 and an increase of 2.8% in 2000 compared to 1999. Same store sales decreased 1.5% in 2001 and increased 2.5% and 4.0% in 2000 and 1999, respectively. Total sales in 2001 compared to the prior year decreased as a result of the sale of the company's regional food service division in the second quarter of 2000, an additional week of business in 2000, a weak economy and increasing competitive activity. Excluding sales from year-over-year comparisons that were generated from the food service division and from the additional week in 2000, the company's sales increased .2%. Adjusting for the extra week of sales, same store sales increased .5% in 2001 and .4% in 2000. Gross profit as a percentage of sales increased from 25.4% in 1999 to 26.3% in 2000 and to 26.7% in 2001. Gross profit dollars realized on sales in 2001 decreased $11.7 million, or 2.2%, to $531.2 million compared to 2000 and increased $34.3 million in 2000 compared to 1999. Over the past three years, the gross profit rate was impacted by the sale of the food service division and by LIFO inventory adjustments. The food service division's lower gross profit rate slightly decreased the company's overall gross profit percentage in prior years. Although the company cannot precisely measure the effects of inflation or deflation upon its operations because of changes in product mix, pricing and competitive influences, it does not believe that either inflation or deflation have had a material effect on sales or results of operations for the past three years. Operating, general and administrative expenses in 2001 totaled $468.2 million or 23.6% of sales, compared to 22.4% in 2000 and 20.7% in 1999. On May 7, 2001, the company repurchased approximately 14.5 million shares of its common stock from the family of the late Sigfried Weis for $434.3 million in cash. The company incurred $5.3 million in non-recurring expenses associated with this transaction, accounting for a substantial portion of the overall increase in operating expenses in 2001. The remaining increase in operating expenses was attributable to rising labor and benefit costs, building and equipment repairs and advertising expenditures. In 2001, the company's investment income of $9.9 million or .5% of sales, decreased $8.7 million or 46.9% compared to the same period a year ago. The company sold the majority of its investment portfolio in the first half of 2001 in order to complete the all cash stock repurchase transaction. In 2000, the company earned $18.6 million in investment income, a $1.3 million decrease from 1999. The company realized gains on the sale of marketable securities of $.6 million in 2001, $1.3 million in 2000 and $3.5 million in 1999. The company's other income and expense is generated from rental payments, coupon-handling fees, cardboard salvage, gain or loss on the sale of fixed assets and interest expense. Other income in 2001 of $10.4 million or .5% of sales, decreased $7.7 million or 42.6% compared to 2000. In 2000, the company realized $5.8 million in other income from the sale of its food service division. The remaining difference between the years presented is due largely to gains or losses realized on closed store facilities. Interest expense in 2001 totaled $1.4 million compared to no interest expense in 2000 or 1999. The company entered into a bank credit agreement in fiscal 2001 in order to complete the previously mentioned stock repurchase transaction and to provide funds for general corporate purposes. The company's combined federal and state effective tax rate was 38.8% in 2001, 36.8% in 2000 and 35.7% in 1999. The tax rate increased in 2001 after the company sold its large position in tax-free investments in order to complete the stock repurchase. Net income in 2001 was $50.1 million or 2.5% of sales compared with $73.8 million or 3.6% of sales in 2000 and $79.7 million or 4.0% of sales in 1999. Basic and diluted earnings per share of $1.55 in 2001 compared to $1.77 in 2000 and $1.91 in 1999. Several unusual items notably affected net income and basic and diluted earnings per share in all three years as previously noted in this report. Basic and diluted earnings per share are computed using weighted-average shares outstanding. At the end of 2001, the company had 27.2 million shares of common stock outstanding, a reduction of 14.5 million shares compared to the prior year. The impact from the company's large stock repurchase was partially realized in the company's earnings per share results for 2001 and will be fully realized in 2002. 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 was $113.9 million in 2001 compared with $125.6 million in 2000 and $111.9 million in 1999. Accounts payable increased $15.0 million in 2001 compared to 2000 due to improved cash management. Accounts receivable decreased in 2000 after the sale of the company's food service division. Working capital decreased 79.4% in 2001, increased 3.2% in 2000, and decreased 1.6% in 1999. The considerable decline in working capital in the current year resulted from the sale of most of the company's investment portfolio in order to fund the large repurchase of common stock. Net cash provided by investing activities during 2001 was $322.8 million compared to $82.4 million used in 2000 and $70.0 million used in 1999. In 2000 and 1999, these funds were used primarily for the purchase of new securities and the purchase of property and equipment. Property and equipment purchases during fiscal 2001 totaled $48.1 million compared to $56.3 million in 2000 and $86.7 million in 1999. Intangible and other assets increased $13.4 million in 2000 with grocery store acquisitions. As a percentage of sales, capital expenditures were 2.4%, 3.4% and 4.3% in 2001, 2000 and 1999, respectively. The capital expansion program includes the construction of new superstores, the expansion and remodeling of existing units, the acquisition of sites for future expansion, new technology purchases and the continued upgrade of the company's processing and distribution facilities. Company management estimates that its current development plans will require an investment of approximately $67.4 million in 2002. Net cash used in financing activities during 2001 was $446.8 million compared to $44.4 million in 2000 and $44.8 million in 1999. The repurchase and cancellation of 14.5 million shares of common stock in May cost the company $434.3 million. The company entered into a bridge credit agreement to provide funds for general corporate purposes in May of 2001. The availability under the bridge loan is on a revolving basis with a final maturity of March 29, 2002. As of December 29, 2001, the unused portion of the credit line was $20 million. The company signed a commitment letter to establish a three-year unsecured revolving credit facility in the amount of $100 million to provide funds to refinance the bridge loan facility and for general corporate purposes including working capital and letters of credit. Management anticipates completion of this new long-term credit facility before the March bridge loan maturity date. Total cash dividend payments on common stock amounted to $1.08 per share in 2001 compared to $1.06 in 2000 and $1.02 in 1999. 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 564,677 shares. The company has no other commitment of capital resources as of December 29, 2001, other than the lease commitments on its store facilities under operating leases that expire at various dates up to 2024. The company's earnings and cash flows are subject to fluctuations due to changes in interest rates as they relate to available-for-sale securities and long-term debt. The company's marketable securities currently consist of Pennsylvania tax-free state and municipal bonds, U.S. Treasury securities, equity securities and other short-term investments. The fair value of the variable rate notes classified under long-term debt is sensitive to changes in LIBOR. 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. Historically, 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 is located in item 7A. Forward-Looking Statements In addition to historical information, this Annual Report 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. 6
Weis Markets, Inc. Item 7A. Quantitative and Qualitative Disclosures about Market Risk: Quantitative Disclosures About Market Risk (dollars in thousands) Expected Maturity Dates Fair Value December 29, 2001 2002 2003 2004 2005 2006 Thereafter Total Dec. 29, 2001 Rate sensitive assets: Fixed interest rate securities $ 15 $ 1,000 $ 1,500 $ --- $ --- $ --- $ 2,515 $ 2,584 Average interest rate 4.97% 4.48% 4.40% --- --- --- 4.73% Variable interest rate securities $ 11,930 --- --- --- --- --- $ 11,930 $ 11,930 Average interest rate 2.80% --- --- --- --- --- 2.80% Rate sensitive liabilities: Variable interest rate securities $ 25,000 $ --- $ --- $ --- $ --- $ --- $ 25,000 $ 25,000 Average interest rate 3.00% --- --- --- --- --- 3.00% (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%
Other relevant market risks The company's equity securities at December 30, 2000 had a cost basis of $3,131,000 and a fair value of $16,367,000. The dividend yield realized on these equity investments was 2.52% in 2000. The company's equity securities at December 29, 2001 had a cost basis of $3,125,000 and a fair value of $14,161,000. The dividend yield realized on these equity investments was 2.90% in 2001. 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 29, 2001 and December 30, 2000 2001 2000 ______________________________________________________________________________ Assets Current: Cash $ 3,255 $ 3,389 Marketable securities 28,675 410,218 Accounts receivable, net 26,530 25,080 Inventories 169,952 168,541 Prepaid expenses 8,294 6,821 Income taxes recoverable 3,395 3,144 ______________________________________________________________________________ Total current assets 240,101 617,193 ______________________________________________________________________________ Property and equipment, net 439,977 441,819 Intangible and other assets, net 24,107 26,892 ______________________________________________________________________________ $ 704,185 $ 1,085,904 ============================================================================== Liabilities Current: Accounts payable $ 98,382 $ 78,162 Accrued expenses 11,043 18,360 Accrued self-insurance 15,040 12,959 Payable to employee benefit plans 8,672 8,663 Deferred income taxes 4,633 2,143 ______________________________________________________________________________ Total current liabilities 137,770 120,287 ______________________________________________________________________________ Deferred income taxes 16,051 17,731 Long-term debt 25,000 --- ______________________________________________________________________________ Shareholders' Equity Common stock, no par value, 100,800,000 shares authorized, 32,978,037 and 47,453,979 shares issued, respectively 7,630 7,594 Retained earnings 648,522 1,069,986 Accumulated other comprehensive income (Net of deferred taxes of $4,595 in 2001 and $5,166 in 2000) 6,479 7,284 ______________________________________________________________________________ 662,631 1,084,864 Treasury stock at cost, 5,774,830 and 5,766,122 shares, respectively (137,267) (136,978) ______________________________________________________________________________ Total shareholders' equity 525,364 947,886 ______________________________________________________________________________ $ 704,185 $ 1,085,904 ============================================================================== 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 29, 2001, December 30, 2000 and December 25, 1999 2001 2000 1999 ______________________________________________________________________________ Net sales $ 1,988,246 $ 2,060,976 $ 2,004,947 Cost of sales, including warehousing and distribution expenses 1,457,066 1,518,113 1,496,375 ______________________________________________________________________________ Gross profit on sales 531,180 542,863 508,572 Operating, general and administrative expenses 468,240 462,780 415,537 ______________________________________________________________________________ Income from operations 62,940 80,083 93,035 Investment income 9,860 18,557 19,892 Other income and expense 9,047 18,172 11,088 ______________________________________________________________________________ Income before provision for income taxes 81,847 116,812 124,015 Provision for income taxes 31,792 42,989 44,290 ______________________________________________________________________________ Net income $ 50,055 $ 73,823 $ 79,725 ============================================================================== Weighted-average shares outstanding 32,298,696 41,695,347 41,718,188 Cash dividends per share $ 1.08 $ 1.06 $ 1.02 Basic and diluted earnings per share $ 1.55 $ 1.77 $ 1.91 ______________________________________________________________________________ See accompanying notes to consolidated financial statements. 9
Weis Markets, Inc. Consolidated Statements of Shareholders' Equity Accumulated (dollars in thousands) Other Total For the Fiscal Years Ended December 29, 2001, Common Retained Comprehensive Treasury Shareholders' December 30, 2000 and December 25, 1999 Stock Earnings Income Stock Equity _______________________________________________________________________________________________________________________ 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 Net income --- 50,055 --- --- 50,055 Other comprehensive income --- --- (805) --- (805) ____________ Comprehensive income 49,250 ____________ Shares issued for options (1,300 shares) 36 --- --- --- 36 Shares purchased and cancelled (14,477,242 shares) --- (434,317) --- --- (434,317) Treasury stock purchased (8,708 shares) --- --- --- (289) (289) Dividends paid --- (37,202) --- --- (37,202) ________________________________________________________________________________________________________________________ Balance at December 29, 2001 $ 7,630 $ 648,522 $ 6,479 $ (137,267) $ 525,364 ======================================================================================================================== 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 29, 2001, December 30, 2000 and December 25, 1999 2001 2000 1999 ______________________________________________________________________________ Cash flows from operating activities: Net income $ 50,055 $ 73,823 $ 79,725 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 43,755 44,169 41,097 Amortization 7,222 6,682 5,179 (Gain) loss on sale of fixed assets 1,629 (5,913) (525) Gain on sale of other assets --- --- (3,413) Gain on sale of marketable securities (570) (1,279) (123) Changes in operating assets and liabilities: Increase in inventories (1,411) (1,395) (8,208) (Increase) decrease in accounts receivable and prepaid expenses (2,923) 8,508 (2,695) (Increase) decrease in income taxes recoverable (251) 1,194 (4,338) Increase (decrease) in accounts payable and other liabilities 14,993 (2,696) 11,399 Decrease in income taxes payable --- --- (6,421) Increase in deferred income taxes 1,381 2,472 209 ______________________________________________________________________________ Net cash provided by operating activities 113,880 125,565 111,886 ______________________________________________________________________________ Cash flows from investing activities: Purchase of property and equipment (48,046) (56,331) (86,660) Proceeds from the sale of property and equipment 86 11,714 1,641 Proceeds from the sale of other assets --- --- 8,012 Purchase of marketable securities (299,064) (259,574) (62,565) Proceeds from maturities of marketable securities 556,141 108,154 69,479 Proceeds from sale of marketable securities 123,660 127,043 125 Increase in intangible and other assets (19) (13,379) --- ______________________________________________________________________________ Net cash provided by (used in) investing activities 322,758 (82,373) (69,968) ______________________________________________________________________________ Cash flows from financing activities: Proceeds from long-term debt, net 25,000 --- --- Proceeds from issuance of common stock 36 35 88 Dividends paid (37,202) (44,191) (42,541) Purchase and cancellation of stock (434,317) --- --- Purchase of treasury stock (289) (199) (2,343) ______________________________________________________________________________ Net cash used in financing activities (446,772) (44,355) (44,796) ______________________________________________________________________________ Net decrease in cash (134) (1,163) (2,878) Cash at beginning of year 3,389 4,552 7,430 ______________________________________________________________________________ Cash at end of year $ 3,255 $ 3,389 $ 4,552 ============================================================================== 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 2001. (b) Definition of Fiscal Year The company's fiscal year ends on the last Saturday in December. Fiscal 2001, 2000 and 1999 were comprised of 52 weeks, 53 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 20 years. (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 $500,000. 12 Weis Markets, Inc. (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 $26.3 million in 2001, $25.4 million in 2000 and $22.9 million in 1999. (m) New Accounting Standards As of December 30, 2001, the company adopted Emerging Issues Task Force Issue Nos. 00-14, "Accounting for Certain Sales Incentives;" 00-22, "Accounting for 'Points' and Certain Other Time-Based or Volume-Based Sales Incentives Offers, and Offers for Free Products or Services to Be Delivered in the Future;" and 00-25, "Vendor Income Statement Characterization of Consideration from a Vendor to a Retailer" (EITF Issues). These EITF Issues establish new rules for accounting for certain sales incentives, loyalty programs and vendor contracts; however, the adoption of these EITF Issues will not have an impact on the company's net income or shareholders' equity. These EITF Issues require certain sales incentives, which prior to adoption were reported as expenses or costs of goods sold, to be classified as a reduction of revenue. Prior year financial statements will be reclassified to conform to the requirements of these EITF Issues. In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, "Business Combinations" (Statement No. 141) and No. 142, "Goodwill and Other Intangible Assets" (Statement No. 142) effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the statements. Other intangible assets will continue to be amortized over their useful lives. The company will apply Statement No. 142 beginning in the first quarter of fiscal 2002. Application of the statement is expected to result in an increase in pre-tax income of approximately $1.4 million for fiscal 2002 due to the elimination of amortization of goodwill. During fiscal 2002, the company will perform the required impairment tests of goodwill. The company has not yet determined what the effect of these impairment tests will be on the earnings and financial position of the company. (n) Earnings Per Share Basic and diluted earnings per share are the same amounts for each period presented. (o) 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. 13 Weis Markets, Inc. Note 2 Marketable Securities Marketable securities, as of December 29, 2001 and December 30, 2000, consisted of: Gross Gross Unrealized Unrealized (dollars in thousands) Amortized Holding Holding Fair December 29, 2001 Cost Gains Losses Value ______________________________________________________________________________ Available-for-sale: Pennsylvania state and municipal bonds $ 1,524 $ --- $ --- $ 1,524 U.S. Treasury securities 1,022 38 --- 1,060 Equity securities 3,125 11,036 --- 14,161 Other short-term investments 11,930 --- --- 11,930 ______________________________________________________________________________ $ 17,601 $ 11,074 $ --- $ 28,675 ============================================================================== 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 ============================================================================== Maturities of marketable securities classified as available-for-sale at December 29, 2001, were as follows: Amortized Fair (dollars in thousands) Cost Value ______________________________________________________________________ Available-for-sale: Due within one year $ 11,945 $ 11,945 Due after one year through five years 2,531 2,569 Equity securities 3,125 14,161 ______________________________________________________________________ $ 17,601 $ 28,675 ====================================================================== See additional disclosures regarding marketable securities in notes 1(d) and 12. 14 Weis Markets, Inc. Note 3 Inventories Merchandise inventories, as of December 29, 2001 and December 30, 2000, were valued as follows: (dollars in thousands) 2001 2000 ______________________________________________________________________________ LIFO $ 134,544 $ 135,632 Average cost 35,408 32,909 ______________________________________________________________________________ $ 169,952 $ 168,541 ============================================================================== If all inventories were valued on the average cost method, which approximates current cost, total inventories would have been $41,014,000 and $42,908,000 higher than as reported on the above methods as of December 29, 2001 and December 30, 2000, respectively. Although management believes the use of the LIFO method for valuing certain inventories 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) 2001 2000 1999 _________________________________________________________________________ Net income $ 48,947 $ 73,477 $ 79,368 Basic and diluted earnings per share $ 1.52 $ 1.76 $ 1.90 ========================================================================= Note 4 Property and Equipment Property and equipment, as of December 29, 2001 and December 30, 2000, consisted of: Useful Life (dollars in thousands) (in years) 2001 2000 ______________________________________________________________________________ Land $ 69,103 $ 63,341 Buildings and improvements 10-60 325,775 312,462 Equipment 3-12 475,472 462,079 Leasehold improvements 5-20 99,692 97,310 ______________________________________________________________________________ Total, at cost 970,042 935,192 Less accumulated depreciation and amortization 530,065 493,373 ______________________________________________________________________________ $ 439,977 $ 441,819 ============================================================================== 15 Weis Markets, Inc. Note 5 Lease Commitments At December 29, 2001, 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) 2001 2000 1999 ______________________________________________________________________________ Minimum annual rentals $ 29,706 $ 27,685 $ 25,794 Contingent rentals 219 297 286 ______________________________________________________________________________ $ 29,925 $ 27,982 $ 26,080 ============================================================================== 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 29, 2001. (dollars in thousands) ______________________________________________________________________________ 2002 $ 28,861 2003 28,122 2004 26,892 2005 23,415 2006 21,370 Thereafter 155,982 ______________________________________________________________________________ $ 284,642 ============================================================================== The company has $1,435,000 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 29, 2001, the future minimum rentals to be received under non-cancelable leases and subleases were $5,431,000. 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 $7,551,000 and $7,536,000 at December 29, 2001 and December 30, 2000, respectively. Retirement plan costs amounted to: (dollars in thousands) 2001 2000 1999 ___________________________________________________________________________ Retirement savings plan $ 955 $ 945 $ 907 Profit-sharing plan 850 850 850 Employee stock bonus plan 40 40 40 Supplemental retirement plans 303 617 600 ___________________________________________________________________________ $ 2,148 $ 2,452 $ 2,397 =========================================================================== 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 191,039 shares of common stock are reserved for issuance at December 29, 2001. 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 29, 2001, in options outstanding under the plan were as follows: Weighted-Average Shares Exercise Price Under Option ____________________________________________________________________________ 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 Granted $32.72 5,750 Exercised $27.81 (1,300) Forfeited $35.40 (950) ____________________________________________________________________________ Balance, December 29, 2001 $34.68 120,020 ============================================================================ Exercise prices for options outstanding as of December 29, 2001 ranged from $26.25 to $37.94. The weighted-average remaining contractual life of those options is 5.9 years. As of December 29, 2001, 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 2001, 2000 and 1999, 20,100, 56,750 and 55,200 rights, respectively, were awarded under the program. Earnings were credited $188,000 in 2001, credited $95,000 in 2000 and charged $295,000 in 1999 for appropriate changes to the accrued expense for this plan. Note 8 Long-Term Debt The company entered into an unsecured $60 million bridge credit agreement on May 7, 2001, to provide funds for general corporate purposes. The availability under the bridge credit agreement, which was reduced to $45 million on November 15, 2001, is on a revolving basis with a final maturity of March 29, 2002. As of December 29, 2001, the unused portion of the facility was $20 million, of which the company incurs a commitment fee of .25% on the unused balance. The debt amount outstanding at December 29, 2001 is classified as long-term based upon management's intent to refinance under this facility. On June 18, 2001, the company signed a commitment letter to establish a three-year unsecured revolving credit facility in the amount of $100 million to provide funds to repay the bridge loan facility and for general corporate purposes including working capital and letters of credit. Management anticipates completion of this new long-term credit facility before the March bridge loan maturity date. The weighted-average interest rate for funds borrowed via the credit facility was 3.0% as of December 29, 2001. 17 Weis Markets, Inc. Note 9 Income Taxes The provision for income taxes consists of: (dollars in thousands) 2001 2000 1999 __________________________________________________________________________ Currently payable: Federal $ 26,637 $ 31,367 $ 31,998 State 3,773 9,150 12,083 Deferred: Federal 1,005 2,151 1,546 State 377 321 (1,337) __________________________________________________________________________ $ 31,792 $ 42,989 $ 44,290 ========================================================================== 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 2001, 2000 and 1999. (dollars in thousands) 2001 2000 1999 __________________________________________________________________________ Tax at statutory rate $ 28,646 $ 40,884 $ 43,405 State income taxes, net of federal income tax benefit 2,697 5,204 7,282 Other (principally tax-exempt investment income in 2000 and 1999) 449 (3,099) (6,397) __________________________________________________________________________ Actual provision (effective tax rate 38.8%, 36.8% and 35.7%, respectively) $ 31,792 $ 42,989 $ 44,290 ========================================================================== Cash paid for income taxes was $30,051,000, $39,729,000 and $52,809,000 in 2001, 2000 and 1999, respectively. The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 29, 2001 and December 30, 2000, are presented below: (dollars in thousands) 2001 2000 ___________________________________________________________________ Deferred tax assets: Accounts receivable $ 675 $ 858 Compensated absences 680 692 Employee benefit plans 4,852 4,606 General liability insurance 1,699 1,178 Litigation settlement --- 2,033 Nondeductible accruals and other 310 306 ___________________________________________________________________ Total deferred tax assets 8,216 9,673 ___________________________________________________________________ Deferred tax liabilities: Inventories (8,254) (6,650) Unrealized gain on marketable securities (4,595) (5,166) Depreciation (16,051) (17,731) ___________________________________________________________________ Total deferred tax liabilities (28,900) (29,547) ___________________________________________________________________ Net deferred tax liability $ (20,684) $ (19,874) ___________________________________________________________________ Current deferred liability - net $ (4,633) $ (2,143) Noncurrent deferred liability - net (16,051) (17,731) ___________________________________________________________________ Net deferred tax liability $ (20,684) $ (19,874) =================================================================== 18 Weis Markets, Inc. Note 10 Comprehensive Income (dollars in thousands) 2001 2000 1999 _____________________________________________________________________________ Net income $ 50,055 $ 73,823 $ 79,725 Other comprehensive income by component, net of tax: Unrealized holding gains (losses) arising during period(Net of deferred taxes of $335, $488 and $(5,031), respectively) (471) 690 (7,093) Reclassification adjustment for gains included in net income(Net of deferred taxes of $236, $530 and $0, respectively) (334) (749) --- _____________________________________________________________________________ Other comprehensive income, net of tax (805) (59) (7,093) _____________________________________________________________________________ Comprehensive income $ 49,250 $ 73,764 $ 72,632 ============================================================================= Note 11 Summary of Quarterly Results (Unaudited) Quarterly financial data for 2001 and 2000 are as follows: (dollars in thousands, except per share amounts) Thirteen Weeks Ended ______________________________________________________________________________ Mar. 31, 2001 June 30, 2001 Sep. 29, 2001 Dec. 29, 2001 ______________________________________________________________________________ Net sales $ 489,095 $ 492,414 $ 498,832 $ 507,905 Gross profit on sales 130,186 131,195 135,854 133,945 Net income 17,194 8,706 11,703 12,452 Basic and diluted earnings per share .41 .26 .43 .46 Fourteen (dollars in thousands, Weeks except per share amounts) Thirteen Weeks Ended Ended ______________________________________________________________________________ Mar. 25, 2000 June 24, 2000 Sep. 23, 2000 Dec. 30, 2000 ______________________________________________________________________________ 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 Note 12 Fair Value Information The carrying amounts for cash, accounts receivable and accounts payable 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. The carrying amount for long-term debt approximates fair value based upon the company's incremental borrowing rates. Note 13 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. These acquisitions were cash-only transactions accounted for by the purchase method. Goodwill arising from these transactions, which is not material, is currently amortized over a 15-year period on a straight-line basis. Note 14 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 29, 2001 and December 30, 2000, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 29, 2001. 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 29, 2001 and December 30, 2000, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 29, 2001, in conformity with accounting principles generally accepted in the United States. Harrisburg, PA Ernst & Young LLP January 31, 2002 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: "Election of Directors" on pages 5 and 6 of the Weis Markets, Inc. definitive proxy statement dated March 8, 2002 is incorporated herein by reference. Officers not listed in the Weis Markets, Inc. definitive proxy statement dated March 8, 2002: Robert P. Hermanns. The company hired Mr. Hermanns in 2001 as Vice President Chief Operating Officer. Mr. Hermanns served as Chief Executive Officer of Shopeze in 1999 and 2000 and was Chief Operating Officer for Procurement and Logistics at American Stores Company from 1995 through 1997. Edward W. Rakoskie, Jr. The company has employed Mr. Rakoskie since 1962 in various operations positions. Mr. Rakoskie served as Vice President Store Operations from 1995 through 1997 and was promoted to Vice President of Operations in 1998. Section 16(a) Beneficial Ownership Compliance Section 16(a) of the Securities Exchange Act of 1934 requires that directors and officers of the Company and beneficial owners of more than 10% of its Common Stock file reports with the Securities and Exchange Commission with respect to changes in their beneficial ownership of equity securities of the company. Ellen W. P. Wasserman became a ten percent owner, on May 7th 2001, due to the company buy back of 14,447,242 shares from the family members of the late Sigfried Weis. The required Form 3 was not filed within 10 days of the event, but was filed at a later date. Mrs. Wasserman's ownership was reported correctly in the Company Proxy Statement dated May 28, 2001. Item 11. Executive Compensation: "Committees of the Board and Meeting Attendance," Compensation Committee Interlocks and Insider Participation," "Summary Compensation Table," "Option/SAR Grants in Last Fiscal Year," "Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values," "Board Compensation Committee Report on Executive Compensation," "Shareholder Return Performance," "Comparative Five-Year Total Returns," and "Retirement Plans," on pages 6 through 11 of the Weis Markets, Inc. definitive proxy statement dated March 8, 2002 are incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management: "Outstanding Voting Securities and Voting Rights" on page 4 of the Weis Markets, Inc. definitive proxy statement dated March 8, 2002 is incorporated herein by reference. 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 $80,049 in 2001. The stockholders of Central Properties include Michael M. Apfelbaum and certain of his family members, Jonathan H. Weis and Robert F. Weis, each of whom is a director of the company. 21 Weis Markets, Inc. 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. All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. (b) There were no reports on Form 8-K filed during the quarter ended December 29, 2001. (c) A listing of exhibits filed or incorporated by reference is as follows: Exhibit No. 3-A Articles of Incorporation 3-B 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 10-A and 10-B 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. The foregoing exhibits are available upon request from the Secretary of the company at a fee of $10.00 per copy. 22 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 03/08/2002 /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 03/08/2002 /s/ Robert F. Weis __________ ___________________________ Robert F. Weis Chairman of the Board of Directors, and Treasurer and Director Date 03/08/2002 /s/ Norman S. Rich __________ ___________________________ Norman S. Rich President and Director Date 03/08/2002 /s/ William R. Mills __________ ___________________________ William R. Mills Vice President Finance, Secretary and Director Date 03/08/2002 /s/ Jonathan H. Weis __________ ___________________________ Jonathan H. Weis Vice President Property Management and Development and Director Date 03/07/2002 /s/ Richard E. Shulman __________ ___________________________ Richard E. Shulman Director 23 Weis Markets, Inc. Date 03/08/2002 /s/ Michael M. Apfelbaum __________ ___________________________ Michael M. Apfelbaum Director Date 03/07/2002 /s/ Steven C. Smith __________ ___________________________ Steven C. Smith Director 24 Weis Markets, Inc. 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, LLC. Pennsylvania 100% Weis Transportation, Inc. Pennsylvania 100% WMK Financing, Inc. Delaware 100% WMK Holdings, Inc. Delaware 100% The consolidated financial statements include the accounts of the company and its subsidiaries. 25