Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported total sales
of $4.09 billion for fiscal year 2018 compared with $4.00 billion in
fiscal year 2017. For the fiscal years ended September 2018 and 2017,
net income totaled $97.4 million in 2018 compared with $53.9 million in
2017. Fiscal year 2018 net income was positively impacted by the passage
of the Tax Cuts and Jobs Act of 2017 (Tax Act).
Total sales for the 13 week fourth quarter of fiscal 2018 were $1.06
billion compared with $1.09 billion for the 14 week fourth quarter of
fiscal 2017. Net income for the fourth quarter of fiscal 2018 totaled
$18.4 million compared with net income of $19.4 million for the fourth
quarter of fiscal 2017.
The fiscal year and quarter ended September 2018 had one less week of
operations compared with the fiscal year and quarter ended September
2017.
Commenting on the results, Robert P. Ingle II, Chairman of the Board,
said, “Our associates’ hard work and dedication contributed to our
outstanding sales. We will continue to invest in our business for
sustainable long-term growth.”
Fourth Quarter Results
Net sales totaled $1.06 billion for the 13 week quarter ended September
29, 2018, compared with $1.09 billion for the 14 week September 2017
quarter. Comparable store sales increased 2.3%, excluding gasoline, and
adjusted to reflect the same number of weeks in each fourth quarter.
Customer count and average transaction size (both excluding gasoline and
adjusted to the same number of weeks) were higher for the fourth quarter
of fiscal 2018 compared with the fourth quarter of fiscal year 2017.
Gross profit for the 13 week fourth quarter of fiscal 2018 totaled
$256.4 million compared with $261.3 million for the 14 week fourth
quarter of fiscal 2017. Gross profit as a percentage of sales was 24.2%
and 24.0% for the 2018 and 2017 fourth quarters, respectively. Excluding
gasoline sales, retail grocery gross margin was higher comparing the
September 2018 and September 2017 fiscal quarters.
Operating and administrative expenses for the September 2018 quarter
totaled $220.9 million. Operating and administrative expenses as a
percentage of sales were 20.8% for the fourth quarter of fiscal 2018,
compared with $220.2 million, or 20.2% of sales, for the fourth quarter
of fiscal 2017. Labor cost increases represented most of the total
operating expense increase.
Interest expense totaled $11.9 million for the fourth quarter of fiscal
2018 compared with $12.7 million for the fourth quarter of fiscal 2017.
Total debt was $865.6 million at the end of fiscal 2018 compared with
$877.9 million at the end of fiscal 2017.
Net income for the September 2018 13 week quarter totaled $18.4 million
compared with net income of $19.4 million for the 14 week September 2017
quarter. Basic and diluted earnings per share for the Company’s publicly
traded Class A common stock were $0.94 and $0.91 per share,
respectively, for the September 2018 quarter compared with $0.99 and
$0.96 per share, respectively, for the September 2017 quarter.
Annual Results
Net sales were $4.09 billion for the 52 week fiscal year ended September
2018 compared with $4.00 billion for the 53 week fiscal year ended
September 2017. Comparable store sales in fiscal year 2018 increased
2.0% over fiscal 2017, excluding gasoline, and adjusted to reflect the
same number of weeks in each fiscal year. The number of transactions and
the average transaction size were both higher in fiscal year 2018
compared with the prior year.
Gross profit for the fiscal year ended September 29, 2018, increased
$16.6 million, or 1.7%, to $980.2 million, or 24.0% of sales, compared
with $963.6 million, or 24.1% of sales, for the fiscal year ended
September 30, 2017. Retail grocery gross margin, excluding gasoline, was
higher comparing the September 2018 and September 2017 fiscal years.
Operating expenses totaled $856.1 million in fiscal 2018 compared with
$837.1 million in fiscal 2017, and were 20.9% of sales for both fiscal
years 2018 and 2017. Labor cost increases represented most of the total
operating expense increase.
Interest expense totaled $47.6 million for the year ended September 29,
2018, and $47.4 million for the year ended September 30, 2017. Interest
rates on the Company’s floating rate debt increased during fiscal year
2018, while overall debt levels did not change significantly over the
past twelve months.
Income tax benefit for fiscal year 2018 totaled $17.0 million compared
with income tax expense of $30.4 million for fiscal year 2017. The Tax
Act, among other things, reduced the federal corporate income tax rate.
Adoption of the Tax Act and a depreciation calculation method change
generated non-recurring tax benefits of $37.3 million in fiscal year
2018.
Net income for fiscal 2018 totaled $97.4 million compared with net
income of $53.9 million for fiscal 2017. Basic and diluted earnings per
share for the Company’s publicly traded Class A common stock were $4.94
and $4.81 per share, respectively, for the year ended
September 29, 2018, compared with $2.74 and $2.66 per share,
respectively, for the year ended September 30, 2017.
Capital expenditures totaled $150.5 million and $127.7 million for
fiscal years 2018 and 2017, respectively. During fiscal 2018, the
Company opened five new store buildings and closed four stores, some of
which were or are being rebuilt. The Company’s other store improvement
capital projects in fiscal 2018 focused on improved merchandising,
convenience and the range of products offered to our customers.
The Company has a line of credit facility totaling $175.0 million with
$165.6 million available (after deducting letters of credit) at
September 29, 2018. The Company is in compliance with all of its debt
agreements and has significant unencumbered assets at September 29, 2018.
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
2018 Form 10-K and Forms 10-Q.
Ingles Markets, Incorporated is a leading supermarket chain with
operations in six southeastern states. Headquartered in Asheville, North
Carolina, the Company operates 200 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)
|
|
Financial Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Year Ended
|
|
|
|
Sept. 29,
|
|
|
Sept. 30,
|
|
Sept. 29,
|
|
|
Sept. 30,
|
|
|
|
2018
(13 weeks)
|
|
|
2017
(14 weeks)
|
|
2018
(52 weeks)
|
|
|
2017
(53 weeks)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
1,059,688
|
|
|
$
|
1,089,392
|
|
|
$
|
4,092,805
|
|
|
|
$
|
4,002,700
|
Gross profit
|
|
|
|
256,431
|
|
|
|
261,289
|
|
|
|
980,169
|
|
|
|
|
963,593
|
Operating and administrative expenses
|
|
|
|
220,886
|
|
|
|
220,230
|
|
|
|
856,074
|
|
|
|
|
837,145
|
Gain/(loss) from sale or disposal of assets
|
|
|
|
57
|
|
|
|
(28
|
)
|
|
|
728
|
|
|
|
|
1,465
|
Income from operations
|
|
|
|
35,603
|
|
|
|
41,031
|
|
|
|
124,824
|
|
|
|
|
127,913
|
Other income, net
|
|
|
|
598
|
|
|
|
1,337
|
|
|
|
3,065
|
|
|
|
|
3,807
|
Interest expense
|
|
|
|
11,949
|
|
|
|
12,696
|
|
|
|
47,570
|
|
|
|
|
47,458
|
Income tax expense (benefit)
|
|
|
|
5,813
|
|
|
|
10,300
|
|
|
|
(17,046
|
)
|
|
|
|
30,388
|
Net income
|
|
|
$
|
18,439
|
|
|
$
|
19,372
|
|
|
$
|
97,365
|
|
|
|
$
|
53,874
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share – Class A
|
|
|
$
|
0.94
|
|
|
$
|
0.99
|
|
|
$
|
4.94
|
|
|
|
$
|
2.74
|
Basic earnings per common share – Class B
|
|
|
$
|
0.85
|
|
|
$
|
0.90
|
|
|
$
|
4.49
|
|
|
|
$
|
2.49
|
Diluted earnings per common share – Class A
|
|
|
$
|
0.91
|
|
|
$
|
0.96
|
|
|
$
|
4.81
|
|
|
|
$
|
2.66
|
Diluted earnings per common share – Class B
|
|
|
$
|
0.85
|
|
|
$
|
0.90
|
|
|
$
|
4.49
|
|
|
|
$
|
2.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional selected information:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
$
|
28,455
|
|
|
$
|
28,181
|
|
|
$
|
113,083
|
|
|
|
$
|
110,929
|
Rent expense
|
|
|
$
|
3,145
|
|
|
$
|
3,263
|
|
|
$
|
12,823
|
|
|
|
$
|
13,607
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 29,
|
|
|
|
|
Sept. 30,
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
2017
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
10,537
|
|
|
|
|
$
|
23,912
|
|
|
|
|
Receivables-net
|
|
|
|
70,057
|
|
|
|
|
|
66,329
|
|
|
|
|
Inventories
|
|
|
|
372,195
|
|
|
|
|
|
349,333
|
|
|
|
|
Other current assets
|
|
|
|
43,953
|
|
|
|
|
|
6,266
|
|
|
|
|
Property and equipment-net
|
|
|
|
1,303,044
|
|
|
|
|
|
1,265,112
|
|
|
|
|
Other assets
|
|
|
|
25,123
|
|
|
|
|
|
22,354
|
|
|
|
|
TOTAL ASSETS
|
|
|
$
|
1,824,911
|
|
|
|
|
$
|
1,733,306
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
|
$
|
12,848
|
|
|
|
|
$
|
12,211
|
|
|
|
|
Accounts payable, accrued expenses and current portion of other
long-term liabilities
|
|
|
247,290
|
|
|
|
|
|
233,353
|
|
|
|
|
Deferred income taxes
|
|
|
|
74,461
|
|
|
|
|
|
69,918
|
|
|
|
|
Long-term debt
|
|
|
|
852,740
|
|
|
|
|
|
865,660
|
|
|
|
|
Other long-term liabilities
|
|
|
|
42,158
|
|
|
|
|
|
41,112
|
|
|
|
|
Total Liabilities
|
|
|
|
1,229,497
|
|
|
|
|
|
1,222,254
|
|
|
|
|
Stockholders' equity
|
|
|
|
595,414
|
|
|
|
|
|
511,052
|
|
|
|
|
TOTAL LIABILITIES AND
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
$
|
1,824,910
|
|
|
|
|
$
|
1,733,306
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181207005030/en/
Copyright Business Wire 2018