Ingles Markets, Incorporated Reports Record Sales and Net Income for Fiscal 2018
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 |
|
|
|
|
Ron Freeman
Chief Financial Officer
(828) 669-2941 (Ext. 223)
View source version on businesswire.com: https://www.businesswire.com/news/home/20181207005030/en/