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  "documentTitle": "Weis Markets, Inc. (WMK)",
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  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-09-05 00:00:00",
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  "pageNumber": 29,
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  "notes": "The slide uses a table to demonstrate the impact of reclassifying vendor credits on gross margin figures.",
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      "text": "Oddly enough, the only purchase ever made by Chairman/CEO Weis was in Nov 2017 ahead of the revision.",
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      "text": "Gross Margin",
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      "kind": "paragraph",
      "text": "Per the 2017 10-K: \"Vendor allowances recorded as credits in cost of sales totaled $114.1 million in 2017, $123.9 million in 2016 and $97.0 million in 2015. Vendor paid cooperative advertising credits totaled $19.2 million in 2017, $19.1 million in 2016 and $17.1 million in 2015. These credits were netted against advertising costs within “Operating, general and administrative expenses.”",
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      "text": "Spruce Point has consistently warned to pay close attention to gross margins when evaluating a company's financial health. It is a particularly important metric for analyzing supermarkets. Weis recently disclosed an accounting change at year end 2017 related to advertising credits that historically inflated gross margins. We pro forma adjust its results to better reflect reality. Oddly enough, the only purchase ever made by Chairman/CEO Weis was in Nov 2017 ahead of the revision. (1) On the next slide, we will illustrate another change made that flatters a more critical performance metric: operating cash flow.",
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      "kind": "paragraph",
      "text": "Per the 10-Q: “As of December 31, 2017, the Company changed its policy for advertising costs to expense advertising costs as incurred, net of vendor paid cooperative advertising credits, in Cost of sales... Management deems the policy change to record net advertising costs in Cost of sales instead of Operating, general and administrative expenses better represents Cost of sales inclusive of direct product costs (net of discounts and allowances), distribution center and transportation costs, manufacturing facility operations and advertising costs that are primarily funded by vendor cooperative advertising credits and occur in the same period the product is sold.”",
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      "kind": "quote",
      "text": "As of December 31, 2017, the Company changed its policy for advertising costs to expense advertising costs as incurred, net of vendor paid cooperative advertising credits, in Cost of sales... Management deems the policy change to record net advertising costs in Cost of sales instead of Operating, general and administrative expenses better represents Cost of sales inclusive of direct product costs (net of discounts and allowances), distribution center and transportation costs, manufacturing facility operations and advertising costs that are primarily funded by vendor cooperative advertising credits and occur in the same period the product is sold. — 2017 10-Q",
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      "text": "1) Weis insider purchase ahead of accounting changes",
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      "text": "Table showing reported vs adjusted gross margins from 2015 to LTM 3/31/18",
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      "kind": "title",
      "text": "Warning Accounting Change Ahead of Insider Buying: Historical Gross Margin Inflation",
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