Weis Markets(WMK) - 2023 Q4 - Annual Report

Company Operations - Weis Markets operates 197 retail food stores across several states, with a total square footage of 9,710,000 square feet as of year-end 2023[10][14]. - Weis Markets self-distributes approximately 56% of products supplied to stores, with three manufacturing facilities processing milk, ice cream, and fresh meat products[14]. - The Company operates 101 retail food stores and leases 96 stores, with leases expiring through 2036[56]. - The Company owns a distribution center in Milton, Pennsylvania, approximately 1.3 million square feet, and another in Northumberland, Pennsylvania, totaling approximately 76 thousand square feet[57]. - The Company employs approximately 23,000 associates, with 95% receiving hourly wages[20]. - The Company has experienced significant labor and supply chain disruptions in 2022 and 2023, affecting store development and construction projects, which are now expected to be completed in 2024 and 2025[13]. Financial Performance - Weis Markets, Inc. reported net sales of $4,696,950, remaining flat compared to $4,695,943 in 2022, with a year-over-year percentage change of 0.0%[86]. - The company's gross profit margin decreased to 24.7% in 2023 from 25.2% in 2022, while gross profit on sales was $1,161,941, down 1.7% from the previous year[86]. - Net income for 2023 was $103,828, a decrease of 17.1% from $125,196 in 2022, with net income as a percentage of net sales at 2.2%[86]. - The company’s operating margin fell to 2.9% in 2023 from 3.3% in 2022, with income from operations at $137,186, down 12.6% year-over-year[86]. - Investment income increased significantly to $13,162 in 2023 from a loss of $82 in 2022, marking a 16151.2% change[86]. - Operating cash flows decreased to $201.6 million in 2023 from $218.0 million in 2022, primarily due to lower net income[110]. - Capital expenditures totaled $104.0 million in 2023, representing 2.2% of net sales, down from 2.5% in 2022[112]. - The company paid total cash dividends of $36.6 million in 2023, an increase from $35.0 million in 2022[113]. Market and Competitive Environment - The retail food industry remains highly competitive, with the Company facing challenges from various competitors, including online food retail[27]. - The Company aims to enhance its market share through disciplined growth, focusing on sales-driven culture and human capital development[78]. Sustainability and Corporate Responsibility - The Company has diverted approximately 43,000 tons of waste from landfills as part of its sustainability strategy, which aims to reduce its overall carbon footprint[17]. Tax and Legal Considerations - The Company is subject to various federal, state, and local laws that may require additional capital expenditures and could adversely affect its business operations[40]. - The Company's future effective tax rate may increase due to changes in laws and pending items with various taxing authorities[41]. - The effective income tax rate rose to 29.2% in 2023 from 22.1% in 2022, reflecting a 20.5% increase in the provision for income taxes[86]. Cybersecurity - The Company has not experienced any material cybersecurity incidents affecting its business strategy or financial condition during the period presented[48]. - The Company engages with third-party experts to evaluate and test its cybersecurity risk management systems[54]. Inventory and Assets - The company reported total current assets of $832,214 as of December 30, 2023, an increase from $741,170 in 2022[135]. - Total assets increased to $2,039,632 in 2023 from $1,959,150 in 2022, indicating a growth of approximately 4.1%[135]. - The company’s inventories were valued at $296,157 as of December 30, 2023, slightly up from $293,274 in 2022[135]. Employee and Labor Costs - Employee-related costs comprised approximately 59.9% of total operating expenses, with direct store labor increasing slightly in 2023[98]. - Total retirement plan costs for 2023 amount to $7,578,000, an increase of 13.47% from $6,679,000 in 2022[206]. Shareholder Information - The Weis family's share ownership represents approximately 65% of the combined voting power of the Company's common stock as of December 30, 2023[42]. - The company has a remaining balance of 752,468 shares for stock repurchase under the Board of Directors' resolution[107]. - Total shareholders' equity increased to $1.374 billion as of December 30, 2023, up from $1.302 billion at the end of 2022, reflecting a growth of 5.5%[142].