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Ingles Markets, Incorporated Reports Sales and Net Income for First Quarter Fiscal 2020

February 6, 2020 GMT

ASHEVILLE, N.C.--(BUSINESS WIRE)--Feb 6, 2020--

Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported its financial results for the three months ended December 28, 2019, compared with the three months ended December 29, 2018. Total sales for the December 2019 quarter were $1.08 billion, an increase of 1.6% over the December 2018 quarter. Net income totaled $17.7 million for the quarter ended December 28, 2019, and $22.2 million for the quarter ended December 29, 2018. The decrease is attributable to $3.7 million of refinancing costs during the current quarter which will result in lower interest expense for future periods. Gasoline gross profits were unusually high industry-wide during the December 2018 quarter and were lower compared with the current quarter.

Robert P. Ingle II, Chairman of the Board, stated, “We were pleased with our sales growth during the important holiday period. We completed a successful long-term financing that will lower our interest cost for many years to come.”

First Quarter Results

Net sales totaled $1.08 billion for the quarter ended December 28, 2019, compared with $1.06 billion for the quarter ended December 29, 2018, an increase of $16.5 million. Comparable store sales, excluding gasoline, increased 2.4%.

Gross profit for the December 2019 quarter was $257.5 million, or 23.9% of sales. Gross profit for the December 2018 quarter was $258.4 million, or 24.3% of sales. As noted above, gasoline gross profits were unusually high for last year’s December quarter.

Operating and administrative expenses for the December 2019 quarter totaled $222.0 million, compared with $218.7 million for the December 2018 quarter. Increased personnel costs accounted for much of the increase, influenced by increased sales and by continued high demand for labor.

Interest expense totaled $11.9 million for the three-month period ended December 28, 2019, compared with $12.2 million for the three-month period ended December 29, 2018. Total debt at the end of December 2019 was $850.0 million, compared with $880.0 million at the end of December 2018. During the current quarter, the Company refinanced $155 million of 5.75% debt with ten-year fixed rate secured debt at 2.95%. Debt extinguishment costs of $3.7 million were incurred to complete the transaction.

Basic and diluted earnings per share for the Company’s publicly traded Class A Common Stock were $0.90 and $0.87, respectively, for the quarter ended December 28, 2019, compared with $1.12 and $1.09 per share, respectively, for the quarter ended December 29, 2018.

Capital expenditures totaled $31.1 million for the December 2019 quarter, compared with $71.0 million for the December 2018 quarter. Last year, the Company had increased capital expenditures associated with additional new store construction, store remodeling, and property acquisitions. Total fiscal 2020 capital expenditures are expected to be between $120 million and $160 million.

The Company currently has a line of credit totaling $175.0 million, of which $165.0 million is currently available. The Company believes its financial resources, including this line of credit and other internal and anticipated external sources of funds, will be sufficient to meet planned capital expenditures, debt service and working capital requirements for the foreseeable future.

The comments in this press release contain certain forward-looking statements. Ingles undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. Ingles’ actual results may differ materially from those projected in forward-looking statements made by, or on behalf of, Ingles. Factors that may affect results include changes in business and economic conditions generally in Ingles’ operating area, pricing pressures, increased competitive efforts by others in Ingles’ marketing areas and the availability of financing for capital improvements. A more detailed discussion of these factors may be found in reports filed by the Company with the Securities and Exchange Commission including its 2019 Form 10-K.

Ingles Markets, Incorporated is a leading supermarket chain with operations in six southeastern states. Headquartered in Asheville, North Carolina, the Company operates 198 supermarkets. In conjunction with its supermarket operations, the Company operates neighborhood shopping centers, most of which contain an Ingles supermarket. The Company also owns a fluid dairy facility that supplies Company supermarkets and unaffiliated customers. The Company’s Class A Common Stock is traded on The NASDAQ Stock Market’s Global Select Market under the symbol IMKTA. For more information, visit Ingles’ website at www.ingles-markets.com.


INGLES MARKETS, INCORPORATED

(Amounts in thousands except per share data)

 

Unaudited Financial Highlights

Condensed Consolidated Statements of Income (Unaudited)

 

 

 

Quarter Ended

 

 

 

December 28,

 

December 29,

 

 

 

2019

 

2018

 

Net sales

 

$

1,078,355

 

$

1,061,837

 

Gross profit

 

 

257,490

 

 

258,411

 

Operating and administrative expenses

 

 

221,979

 

 

218,685

 

Gain (loss) from sale or disposal of assets

 

 

2,964

 

 

(262

)

Income from operations

 

 

38,475

 

 

39,464

 

Other income, net

 

 

197

 

 

895

 

Interest expense

 

 

11,949

 

 

12,212

 

Loss on early extinguishment of debt

 

 

3,719

 

 

Pretax Income

 

 

23,004

 

 

28,147

 

Income tax expense

 

 

5,317

 

 

5,995

 

Net income

 

$

17,687

 

$

22,152

 

 

Basic earnings per common share – Class A

 

$

0.90

 

$

1.12

 

Diluted earnings per common share – Class A

 

$

0.87

 

$

1.09

 

Basic earnings per common share – Class B

 

$

0.82

 

$

1.02

 

Diluted earnings per common share – Class B

 

$

0.82

 

$

1.02

 

 

Additional selected information:

 

 

 

 

 

Depreciation and amortization expense

 

$

28,434

 

$

27,817

 

Rent expense

 

$

2,674

 

$

3,163

 

 

Condensed Consolidated Balance Sheets (Unaudited )

 

 

 

December 28,

 

September 28,

 

 

 

2019

 

2019

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

23,027

 

$

42,125

 

Receivables-net

 

 

75,528

 

 

71,951

 

Inventories

 

 

371,582

 

 

374,129

 

Other current assets

 

 

10,998

 

 

8,898

 

Property and equipment-net

 

 

1,345,557

 

 

1,344,267

 

Other assets

 

 

71,254

 

 

25,958

 

TOTAL ASSETS

 

$

1,897,946

 

$

1,867,328

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current portion of long-term debt

 

$

20,233

 

$

12,600

 

Accounts payable, accrued expenses and current portion of other long-term liabilities

 

 

214,995

 

 

234,979

 

Deferred income taxes

 

 

76,748

 

 

75,499

 

Long-term debt

 

 

829,813

 

 

839,638

 

Other long-term liabilities

 

 

76,847

 

 

41,890

 

Total Liabilities

 

 

1,218,636

 

 

1,204,606

 

Stockholders' equity

 

 

679,310

 

 

662,722

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,897,946

 

$

1,867,328

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20200206005118/en/

CONTACT: Ron Freeman

Chief Financial Officer

(828) 669-2941 (Ext. 223)

KEYWORD: UNITED STATES NORTH AMERICA NORTH CAROLINA

INDUSTRY KEYWORD: SUPERMARKET RETAIL SPECIALTY FOOD/BEVERAGE

SOURCE: Ingles Markets, Incorporated

Copyright Business Wire 2020.

PUB: 02/06/2020 07:30 AM/DISC: 02/06/2020 07:30 AM

http://www.businesswire.com/news/home/20200206005118/en