WMK 10-Q Quarter ended March 26, 2016


[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 2 6 , 201 6
	or
[  ]	TRANSITION REPOR T PURSUANT TO SECTION 13 OR 15(d ) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________to_________
	Commission File Number 1-5039


PENNSYLVANIA (State or other jurisdiction of incorporation or organization)		24-0755415 (I.R.S. Employer Identification No.)
 1000 S. Second Street P. O. Box 471 Sunbury, Pennsylvania (Address of principal executive offices)		17801-0471 (Zip Code)


Registrant's telephone number, including area code: (570) 286-4571	Registrant's web address:  www.weismarkets.com



Large accelerated filer  [  ]			Accelerated filer  [X]
Non-accelerated filer   [  ]	(Do not check if a smaller reporting company)		Smaller reporting company  [  ]


 FORM 10-Q	Page
 Part I. Financial Information
 Item 1. Financial Statements
 Consolidated Balance Sheets	1
 Consolidated Statements of Income	2
 Consolidated Statements of Comprehensive Income	3
 Consolidated Statements of Cash Flows	4
 Notes to Consolidated Financial Statements	5
 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	10
 Item 3. Quantitative and Qualitative Disclosures about Market Risk	17
 Item 4. Controls and Procedures	17
 Part II. Other Information
 Item 6. Exhibits	18
 Signatures	18
 Exhibit 31.1 Rule 13a-14(a) Certification - CEO
 Exhibit 31.2 Rule 13a-14(a) Certification - CFO
 Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350


		March 26, 2016			December 26, 2015
(dollars in thousands)		(unaudited)
Assets
Current:
Cash and cash equivalents	$	30,401		$	17,596
Marketable securities		78,561			91,629
SERP investment		9,842			9,079
Accounts receivable, net		82,994			88,083
Inventories		226,047			229,399
Prepaid expenses and other current assets		16,629			17,198
Income taxes recoverable		-			1,666
Total current assets		444,474			454,650
Property and equipment, net		745,679			738,985
Goodwill		35,162			35,162
Intangible and other assets, net		7,663			7,162
Total assets	$	1,232,978		$	1,235,959

Liabilities
Current:
Accounts payable	$	138,697		$	160,441
Accrued expenses		43,616			37,819
Accrued self-insurance		17,301			16,770
Deferred revenue, net		4,382			6,898
Income taxes payable		11,107			-
Total current liabilities		215,103			221,928
Postretirement benefit obligations		13,362			14,368
Accrued self-insurance		22,761			22,761
Deferred income taxes		96,326			97,020
Other		962			8,135
Total liabilities		348,514			364,212
Shareholders’ Equity
Common stock, no par value, 100,800,000 shares authorized, 33,047,807 shares issued,
26,898,443 shares outstanding		9,949			9,949
Retained earnings		1,019,953			1,007,894
Accumulated other comprehensive income
(Net of deferred taxes of $3,782 in 2016 and $3,323 in 2015)		5,419			4,761
		1,035,321			1,022,604
Treasury stock at cost, 6,149,364 shares		(150,857)			(150,857)
Total shareholders’ equity		884,464			871,747
Total liabilities and shareholders’ equity	$	1,232,978		$	1,235,959

1



	13 Weeks Ended
(dollars in thousands, except shares and per share amounts)	March 26, 2016			March 28, 2015
Net sales	$	738,204		$	712,426
Cost of sales, including warehousing and distribution expenses		531,092			517,311
Gross profit on sales		207,112			195,115
Operating, general and administrative expenses		175,842			175,250
Income from operations		31,270			19,865
Investment income		637			532
Income before provision for income taxes		31,907			20,397
Provision for income taxes		11,778			7,074
Net income	$	20,129		$	13,323

Weighted-average shares outstanding, basic and diluted		26,898,443			26,898,443
Cash dividends per share	$	0.30		$	0.30
Basic and diluted earnings per share	$	0.75		$	0.50

2



	13 Weeks Ended
(dollars in thousands)	March 26, 2016			March 28, 2015
Net income	$	20,129		$	13,323
Other comprehensive income by component, net of tax:
Available-for-sale marketable securities
Unrealized holding gains arising during period
(Net of deferred taxes of $570 and $13 , respectively)		816			18
Reclassification adjustment for gains included in net income
(Net of deferred taxes of $111 and $3 , respectively)		(158)			(3)
Other comprehensive income, net of tax		658			15
Comprehensive income, net of tax	$	20,787		$	13,338

3



		13 Weeks Ended
(dollars in thousands)		March 26, 2016		March 28, 2015
Cash flows from operating activities:
Net income	$	20,129	$	13,323
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation		16,233		15,303
Amortization		2,135		1,996
(Gain) loss on disposition of fixed assets		(75)		8
Gain on sale of marketable securities		(269)		(6)
Deferred income taxes		(1,153)		(3,730)
Changes in operating assets and liabilities:
Inventories		3,352		3,093
Accounts receivable and prepaid expenses		5,658		4,608
Income taxes recoverable		1,666		612
Accounts payable and other liabilities		(21,239)		(10,030)
Income taxes payable		11,107		5,666
Other		525		183
Net cash provided by operating activities		38,069		31,026
Cash flows from investing activities:
Purchase of property and equipment		(29,935)		(20,624)
Proceeds from the sale of property and equipment		124		27
Purchase of marketable securities		(1,284)		(9,907)
Proceeds from the sale of marketable securities		15,213		3,191
Purchase of intangible assets		(549)		(644)
Change in SERP investment		(763)		(873)
Net cash used in investing activities		(17,194)		(28,830)
Cash flows from financing activities:
Dividends paid		(8,070)		(8,070)
Net cash used in financing activities		(8,070)		(8,070)
Net increase (decrease) in cash and cash equivalents		12,805		(5,874)
Cash and cash equivalents at beginning of year		17,596		22,986
Cash and cash equivalents at end of period	$	30,401	$	17,112

4

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WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

5

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WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

6

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WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)



			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
March 26, 2016	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities	$	1,198	$	7,659	$	-	$	8,857
Level 2
Municipal bonds		68,162		1,553		(11)		69,704
	$	69,360	$	9,212	$	(11)	$	78,561


		0
			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
December 26, 2015	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities	$	1,198	$	6,682	$	-	$	7,880
Level 2
Municipal bonds		82,347		1,468		(66)		83,749
	$	83,545	$	8,150	$	(66)	$	91,629


		Amortized		Fair
(dollars in thousands)		Cost		Value
Available-for-sale:
Due within one year	$	5,401	$	5,439
Due after one year through five years		46,389		47,209
Due after five years through ten years		16,372		17,056
Equity securities		1,198		8,857
	$	69,360	$	78,561

7

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WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)



		Unrealized Gains
		on Available-for-Sale
(dollars in thousands)		Marketable Securities
Accumulated other comprehensive income balance as of December 26, 2015	$	4,761

Other comprehensive income before reclassifications		816
Amounts reclassified from accumulated other comprehensive income		(158)
Net current period other comprehensive income		658
Accumulated other comprehensive income balance as of March 26, 2016	$	5,419



		Gains Reclassified from
		Accumulated Other Comprehensive Income to the
		Consolidated Statements of Income
		13 Weeks Ended
(dollars in thousands)	Location		March 26, 2016		March 28, 2015
Unrealized gains on available-for-sale marketable securities
	Investment income	$	269	$	6
	Provision for income taxes		(111)		(3)
Total amount reclassified, net of tax		$	158	$	3

8

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WEIS MARKETS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

9

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WEIS MARKETS, INC.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following discussion and analysis of Weis Markets, Inc.’s (the “Company”) financial condition and results of operations should be read in conjunction with the unaudited Consolidated Financial Statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q, the Company’s audited Consolidated Financial Statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 2 6 , 201 5 , filed with the U.S. Securities and Exchange Commission, as well as the cautionary statement captioned "Forward-Looking Statements" immediately following this analysis.



Overview

Weis Markets, Inc. was founded in 1912 by Harry and Sigmund Weis, in Sunbury, Pennsylvania. Today, the Company ranks among the top 50 food and drug retailers in the United States in re venues generated. Currently , the Company operate s 16 2 retail food stores in Pennsylvania and four surrounding states: Maryland, New Jersey, New York and West Virginia .



Company revenues are generated in its retail food stores from the sale of a wide variety of consumer products including groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel, and general merchandise items, such as health and beauty care and household products.  The Company supports its retail operations through a centrally located distribution facility, its own transportation fleet, three manufacturing facilities and its administrative offices.  The Company's operations are reported as a single reportable segment.



Results of Operations





Income is earned by selling merchandise at price levels that produce revenues in excess of cost of merchandise sold and operating and administrative expenses.  Although the Company may experience short term fluctuations in its earnings due to unforeseen short-term operating cost increases, it historically has been able to increase revenues and maintain stable earnings from year to year.



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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Results of Operations (continued)



Net Sales
The Company's revenues are earned and cash is generated as merchandise is sold to customers at the point of sale.  Discounts provided to customers by the Company at the point of sale are recognized as a reduction in sales as products are sold or over the life of a promotional program if redeemable in the future.  Discounts provided by vendors, usually in the form of paper coupons, are not recognized as a reduction in sales provided the coupons are redeemable at any retailer that accepts coupons.



Total store sales increased 3 . 6 % in the first quarter of 201 6 compared to the same period in 201 5 .  Excluding fuel sales, total store s ales increased 3.6 %.



When calculating the percentage change in comparable store sales, the Company defines a new store to be comparable when it has been in operation for five full quarters.  Relocated stores and stores with expanded square footage are included in comparable store sales since these units are located in existing markets and are open during construction.  Planned store dispositions are excluded from the calculation.  The Company only includes retail food stores in the calculation.



Comparable store sales increased 3.6 % in the first quarter of 201 6 compared to the same quarter in 201 5 .  Excluding fuel sales, comparable store sales increased 3.7 % in first quarter of 201 6 compared to the same period in 201 5 . The Company’s first quarter sales benefited from the Easter holiday period, which fell in the second quarter last year.  Management estimates the incremental holiday sales impact was approximately $7.1 million or an increase in comparable store sales of 1.0% .  While the first quarter sales experienced a surge due to the Easter holiday period shift, the second quarter sales will be adversely affected , as there is usually a slump in sales the week following the holiday.



The Company also attributes the increased sales to its continued strategic pricing investments and ongoing improvement of its store assortment by market. This includes targeted promotional activity in key regional markets and its Everyday Lower Prices (EDLP) and Lowest Price Guarantee promotional programs. Compared to the first quarter of 201 5 , the Company experienced a 1.1% de crease in average sales per customer transaction in the first quarter of 201 6 , while identical cust omer store visits increased by 4.7 %.



The Company’s results also benefited from improved store level , supply chain and store support efficiencies to de liver a better customer experience, which increased customer traffic and overall market share. In addition , the Weis Preferred Club Shopper program continues to target customer members with personalized offers and digital coupons to help them save money. As part of this loyalty marketing program, t he Company continues to offer its "Gas Rewards" program in most markets.  The "Gas Rewards" program allows Weis Preferred Shoppers club card members to earn gas discounts resulting from their in-store purchases.  Customers can redeem these gas discounts at any of the thirty-one Weis Gas-n-Go locations, as well as participating third-party gas retail locations such as Sheetz convenience stores, which are located in most of the Company’s markets .



Comparable center store sales increased 1.2% in the first quarter of 2016 compared to the same quarter in 2015. Within center store sales, c omparable frozen department sales increased 2.8% and c omparable health and beauty care sales increased 3.0% in the first quarter of 2016 compared to the same quarter in 2015. Both categories benefited from new promotional programs which began in January 2016 .



Comparable fresh sales increased 5.2% in the first quarter of 2016 compared to the same quarter in 2015. Within fresh sales, c omparable produce, food service , bakery and floral department sales increased 6.4%, 11.0%, 13.2% and 29.1 %, respectively , in the first quarter of 2016 compared to the same quarter of 2015. These increases are primarily due to the Easter holiday sales shift . In addition to Easter sales, produce sales increased as a result of inflation during the first quarter of 2016 . F ood service sales also increas ed due to the Company’s expanded lunch options and the rotisserie c hicken program .

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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Results of Operations (continued)



Net Sales (continued)

Compa rable pharmacy sales increased 10.0 % in the first quarter of 201 6 compared to the same period in 201 5. The pharmacy sales increase was driven by an increased number of filled prescriptions, primar ily due to an increased acceptance of additional preferred third-party insurance plans as well as exp a nded pharmacy hours.



Comparable fuel sales decreased 9.1 % in the first quarter of 2 01 6 compared to the same quarter in 201 5 . The fuel sales decrease is mainly due to decreasing retail fuel prices.  According to the U.S. Department of Energy, the thirteen week average price of gasoline in the Central Atlantic States decreased 16.8 % or $ 0 . 43 per gallon in the first quarter of 201 6 compared to the same quarter in 201 5 . While fuel prices decreased, the impact was minimized as a result of the Company selling additional gallons due to the timing of the current gas rewards redemption period ending.

Management remains confident in its ability to generate sales growth in a highly competitive environment, but also understands some competitors have greater financial resources and could use these resources to take measures which could adversely affect the Company's competitive position.



Cost of Sales and Gross Profit
Cost of sales consists of direct product costs (net of discounts and allowances), distribution center and transportation costs, as well as manufacturing facility operations. Almost all of the increase in cost of sales in 2016, as compared to 2015 is due to the increased sales volume in 2016.  Both direct product cost and distribution cost increase when sales volume  increases.



According to the latest U.S. Bureau of Labor Statistics’ report, the annual Seasonally Adjusted Food-at-Home Consumer Price Index increased 0.3 % compared to an increase of 2.9 % for the same period last year . Even though the U.S. Bureau of Labor Statistics’ index rates may be reflective of a trend, it will not necessarily be indicative of the Company’s actual results. Despite the fluctuation of retail and wholesale prices, the Company has achieved a gross profit rate of 28.1 % and 27.4 % in the first quarter of 201 6 and 201 5 , respectively . Th e increase in gross profit rate was driven by a shift in sales mix f rom fuel to grocery sales which carry a higher profit margin.



The Company's profitability is impacted by the cost of oil.  Fluctuating fuel prices affect the delivered cost of product and the cost of other petroleum-based supplies . As a percentage of sales, the cost of diesel fuel used by the Company to deliver goods from its distribution center to its stores decreased 0.0 6 % in the first quarter of 201 6 compared to the first quarter of 201 5 . Al though the Company experienced a decrease in these costs, the decline was minimized due to higher fuel usage resulting from more store deliveries to meet the higher sales demand. According to the U.S. Department of Energy, the thirteen week average diesel fuel price for the Central Atlantic States in the first quarter of 201 6 was $ 2.27 per gallon compared to $ 3.20 per gallon in the same period in 201 5 , for an average de crease of $ 0.93 per gallon. Based upon the U.S. Energy Information Administration’s current projections, the Company is expecting diesel fuel prices to remain fairly steady through out the rest of 201 6 .



Although the Company experienced product cost inflation and deflation in various commodities for the quarters presented, management cannot accurately measure the full impact of inflation or deflation on retail pricing due to changes in the types of merchandise sold between periods, shifts in customer buying patterns and the fluctuation of competitive factors.



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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Results of Operations (continued)



Operating, General and Administrative Expenses
Business operating costs including expenses generated from administration and purchasing functions, are recorded in "Operating, general and administrative expenses."  Business operating costs include items such as wages, benefits, utilities, repairs and maintenance, advertising costs and credits, rent, insurance, depreciation, leasehold amortization and costs for outside provided services. The majority of the increase in operating, general and administrative expenses were driven by increased sales.



The Company may not be able to recover rising expenses through increased prices charged to its customers. The majority of our associates are paid hourly rates related to federal and state minimum wage laws. The Company increased the base hourly rate for associates to $9 per hour, as of August 2, 2015 , in order to attract and retain talented associates with a goal of delivering best-in-class customer service.  The Company has decided not to increase prices to offset this hourly wage rate increase .



Employee-related costs such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately 60% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor increased 0.2% compared to the first quarter of 2015. The increase in base hourly rate for associates to $9 per hour and related wage compression had an estimated cost of $ 2.7 million in the first quarter of 201 6 . Hourly wages also increased in 2016 due to the additional sales resulting from the Easter holiday shifting into the first quarter. Increases in the employee related expenses were offset by savings realized from a store labor efficiency project.



The Company’s self-insured health care benefit expenses decreased $808,000 or 12.5% in the first quarter of 2016 compared to the same quarter last year.  The variance is mainly attributed to a de crease in claims costs. However, t he Company remains concerned about the impact that The Patient Protection and Affordable Care Act (ACA) will have on its future operating expenses. Based on the ACA definition of full time employment, t here is approximately an 18% increase in full time employees , which is currently estimated to cost the Company $1.0 million annually .



Depreciation and amortization expense was $ 18.4 million, or 2. 5 % of net sales for the first quarter of 201 6 compared to $ 17.3 million, or 2. 4 % of net sales for the first quarter of 201 5 . The increase in depreciation and amortization expense was the result of additional capital expenditures as the Company implements its capital expansion program.  See the Liquidity and Capital Resources section for further information regarding the Company’s capital expansion program.

Retail store profitability is sensitive to volatility in utility costs due to the amount of electricity and gas required to operate the Company’s stores and facilities. The Company is responding to this volatility in operating costs by employing conservation technologies, procurement strategies and associate energy awareness programs to manage and reduce consumption. The Company continues to be a member of the EPA GreenChill program for advancing environmentally beneficial refrigerant management systems and has ten stores registered under this program.  In addition, all Company stores have an assigned Green Leader to promote in-store energy conservation.

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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Results of Operations (continued)



Operating, General and Administrative Expenses (continued)



Employee-related expenses increased in dollars and as a percent of sales for the reasons noted above , primarily related to increases in the bas ic hourly rate and increases in sales volume. Hourly employees, particularly part-time employees, are required to work increased hours when there is growth in sales volume. Increases in emp lo yee related expenses were offset by savings realized from a store labor efficiency project.



Store advertising expense decreased due to reduced spending on direct mail and weekly ads , as well as advert ising fewer grand re-openings in the first quarter of 2016 compared to 2015.



Depreciation and amortization increased in the first quarter of 2016 compared to the same quarter of 2015 as a result of the Company’s store capital expenditure program and technology investments.



Utility expense decreased in the first quarter of 2016 for the reasons noted above related to energy conservation efforts and procurement strategies, along with reduced electricity costs and usage and a reduction in the use of natural gas.



Store supplies expense decreased in the first quarter of 2016 due to planned purchas ing changes which will be shifting store supplies expense from the first quarter of 2016 to future quarters.



General liability insurance expense decrease d due to a reduced number of general liability payments in the first quarter of 2016 compared to the first quarter of 2015.

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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Results of Operations (continued)



Investment Income

The Company’s investment portfolio consists of marketable securities, which currently includes municipal bonds and equity securities, as well as the Company’s SERP investment, which is comprised of mutual funds that are maintained within the Company’s non-qualified supplemental executive retirement plan and the non-qualified pharmacist deferred compensation plan.  The Company classifies all of its municipal bonds and equity securities as available-for-sale.  The SERP investments are classified as trading securities.





B ond income increased in the first quarter of of 2016 compared to the first quarter of 2015 as a result of recognizing gains on the sale of municipal bonds in the first quarter of 2016 .



Provision for Income Taxes
The effective income tax rate was 36.9 % and 34.7 % for the first quarter of 201 6 and 201 5 , respectively. The increase in the effective income tax rate is due to an increase in the state tax expense. The effect of this increase was partially offset by an increase in tax benefits related to food donations, the Domestic Production Activities Deduction and the Work Opportunity Tax Credit. Historically, the effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes, net of permanent differences.



Liquidity and Capital Resources



During the first quarter of 201 6 , the Company generated $ 38.1 million in cash flows from operating activities compared to $ 31.0 million for the same period in 201 5 . Cash flows from operating activities increased in the first quarter of 2016 as a result of increased sales, despite a decrease in accounts payable, compared to the first quarter of 2015 . Since the beginning of the fiscal y ear, working capital de creased 1.4 % in the first quarter of 201 6 as compared to an increase of 0.2% in the first quarter of 201 5 .



Net cash used in investing activities was $ 17.2 million compared to $ 28.8 million in the first quarter of 201 6 and 201 5 , respectively. Property and equipment purchases during the fir st quarter of 201 6 totaled $ 29.9 million compared to $ 20.6 million in the first quarter of 201 5 . The increase was partially attributed to the Company purchasing four properties in the first quarter of 2016. As a percentage of sales, capita l expenditures were 4. 1 % and 2.9 % in the first quarter of 201 6 and 201 5 , respectively. The sale of $15.2 million of marketable securities in the first quarter of 2016 reduced the Company’s net investing activities, whereas the Company purchased $9.9 million of marketable securities in the first quarter of 2015.



The Company’s 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 distribution facilities and transportation fleet.  Management currently plans to invest approximately $1 40 million in its capital expansion program in 2016 .

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WEIS MARKETS, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

Liquidity and Capital Resources (continued)



Net cash used in financing activities was $8.1 million in the first quarter of 201 6 and 201 5 , which solely consisted of divide nd payments to shareholders.  As of March 2 6 , 201 6 , the Company had a $30 million line of credit, of which $ 13.3 million was committed to outstanding letters of credit.  The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company.  The Company does not anticipate drawing on any of them. The Company has a $50 million short-term facility agreement to fund future financing activities .



Total cash dividend payments on common stock, on a per share basis, amounted to $.30 in the first quarter of 201 6 and 201 5 .  At its regular meeting held in April, the Board of Directors unanimously approved a quarterly dividend of $.30 per share, payable on May 1 6 , 201 6 to shareholders of record on May 2 , 201 6 .  The Board of Directors’ 2004 resolution authorizing the repurchase o f up to one million shares of the Company’s common stock has a remaining balance of 752,468 shares.



The Company has no other commitment of capital resources as of March 2 6 , 201 6 , other than the lease commitments on its store facilities and transportation equipment under operating leases that expire at various dates through 2029. The Company anticipates funding its working capital requirements and its $ 1 4 0.0 million 201 6 capital expansion program through cash and investment reserves and future internally generated cash flows from operations.



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 any future long-term debt borrowings.  The Company’s marketable securities portfolio currently consists of municipal bonds and equity securities.  Other short-term investments are classified as cash equivalents on the Consolidated Balance Sheets.



Accounting Policies and Estimates



The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the Consolidated Financial Statements included in the 201 5 Annual Report on  Form 10-K.  There have been no changes to the Critical Accounting Policies since the Company filed its Annual Report on Form 10-K for t he fiscal year ended December 2 6 , 201 5 .



Forward-Looking Statements



In addition to historical information, this 10-Q Report may contain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  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.

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WEIS MARKETS, INC.



I TEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Quantitative Disclosure - There have been no material changes in the Compan y's mark et risk during the three months ended March 2 6 , 201 6 .  Quantitative information is set forth in Item 7a on the Company’s Annual Report on Form 10-K under the caption “Quantitative and Qualitative Disclosures About Market Risk,” which was filed for the fiscal year ended December 2 6 , 201 5 and is incorporated herein by reference.



Qualitative Disclosure - This information is set forth in the Company's Annual Report on Form 10-K under the caption “Liquidity and Capital Resources,” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which was filed for the fiscal year ended December 2 6 , 201 5 and is incorporated herein by reference.



I TEM 4 . CONTROLS AND PROCEDURES



The Chief Executive Officer and the Chief Financial Officer, together with the Company’s Disclosure Committee, evaluated the Company’s disclosure controls and procedures as of the fiscal quarter ended March 2 6 , 201 6 .  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports was accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.



In connection with the evaluation described above, there was no change in the Company’s internal control over financial reporting durin g the fiscal quarter ended March 2 6 , 201 6 , that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.



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 Table of Contents

WEIS MARKETS, INC.

PART II – OTHER INFORMATION

ITEM 6. E XHIBITS



Exhibits
Exhibit 31.1 Rule 13a-14(a) Certification - CEO
Exhibit 31.2 Rule 13a-14(a) Certification - CFO
Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350



SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934 , the Registrant has duly caused this report to b e signed on its behalf by the undersigned there unt o duly authorized .





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