Business Wire | May 5, 2021 07:30AM EDT

Ingles Markets, Incorporated Reports Sales and Net Income for Second Quarter and First Six Months of Fiscal 2021

May 05, 2021

ASHEVILLE, N.C.--(BUSINESS WIRE)--May 05, 2021--Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported increased sales and net income for the three and six months ended March 27, 2021.

The coronavirus (COVID-19) pandemic was declared a national emergency on March 13, 2020. The pandemic has had a significant impact on the Company's operations since then. At this time the Company cannot predict the impact of the pandemic on future periods.

Robert P. Ingle II, Chairman of the Board, stated, "We continue to be pleased with our results and wish to thank all our associates for their dedication and hard work."

Second Quarter Results

Net sales totaled $1.18 billion for the quarter ended March 27, 2021, an increase of 3.4% compared with $1.14 billion for the quarter ended March 28, 2020.

Gross profit for the second quarter of fiscal 2021 totaled $310.5 million, or 26.2% of sales. Gross profit for the second quarter of fiscal 2020 was $291.6 million, or 25.5% of sales.

Operating and administrative expenses for the March 2021 quarter totaled $236.9 million compared with $228.4 million for the March 2020 quarter. Most of the increase was due to higher costs incurred to support additional safety measures related to the pandemic.

Interest expense totaled $6.2 million for the three-month period ended March 27, 2021, compared with $10.2 million for the three-month period ended March 28, 2020. Total debt at the end of March 2021 was $647.8 million compared with $842.1 million at the end of March 2020. The Company continues to reduce higher rate debt and has refinanced debt at lower rates over the past twelve months.

Net income totaled $52.2 million for the three-month period ended March 27, 2021, compared with $40.3 million for the three-month period ended March 28, 2020. Basic and diluted earnings per share for Class A Common Stock were $2.65 and $2.58, respectively, for the quarter ended March 27, 2021, compared with $2.04 and $1.99, respectively, for the quarter ended March 28, 2020.

First Half Results

First half fiscal 2021 net sales totaled $2.37 billion, an increase of 6.8% compared with $2.22 billion in the first half of 2020.

Gross profit for the six months ended March 27, 2021, totaled $624.7 million, compared with $549.1 million for the first six months of last fiscal year. Gross profit, as a percentage of sales, was 26.3% for the March 2021 six-month period, compared with 24.7% for the March 2020 six-month period.

Operating and administrative expenses totaled $475.0 million for the six months ended March 27, 2021, and $450.4 million for the six months ended March 28, 2020. Increased labor and other pandemic-related costs accounted for most of the increase.

Interest expense decreased to $12.6 million for the six-month period ended March 27, 2021, compared with $22.1 million for the six-month period ended March 28, 2020. During fiscal year 2020, 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. Since March 2020, the Company repaid an additional $250 million of the 5.75% debt.

Net income totaled $106.0 million for the six-month period ended March 27, 2021, compared with $58.0 million for the six-month period ended March 28, 2020. Basic and diluted earnings per share for Class A Common Stock were $5.38 and $5.24, respectively, for the six months ended March 27, 2021, compared to $2.94 and $2.86, respectively, for the six months ended March 28, 2020.

Capital expenditures for the March 2021 six-month period totaled $69.4 million compared with $56.8 million for the March 2020 six-month period. Capital expenditures are focused on stores that opened this fiscal year as well as stores scheduled to open later.

The Company currently has $81.5 million available under its $175.0 million line of credit. The Company believes its financial resources, including the 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.

Ingles continues to provide additional pandemic support to its communities, including increased donations to local food banks and purchases from local vendors.

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 2020 Form 10-K and 2021 Forms 10-Q.

Ingles Markets, Incorporatedis a leading grocer 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 Ingles supermarkets and unaffiliated customers. To learn more about Ingles Markets visit ingles-markets.com.

INGLES MARKETS, INCORPORATED

(Amounts in thousands except per share data)



Unaudited Financial Highlights

Condensed Consolidated Statements of Income (Unaudited)



Three Months Ended Six Months Ended

March 27, March 28, March 27, March 28,

2021 2020 2021 2020



Net sales $ 1,184,555 $ 1,145,482 $ 2,374,998 $ 2,223,837

Gross profit 310,500 291,588 624,689 549,077

Operating andadministrative 236,850 228,395 475,049 450,374 expenses

Gain from saleor disposal of 663 108 1,115 3,073 assets

Income from 74,313 63,301 150,755 101,776 operations

Other income, 646 207 1,337 405 net

Interest expense 6,195 10,184 12,596 22,133

Loss on earlyextinguishment --- --- --- 3,719 of debt

Income taxexpense 16,575 13,032 33,483 18,349 (benefit)

Net income $ 52,189 $ 40,292 $ 106,013 $ 57,980



Basic earningsper common share $ 2.65 $ 2.04 $ 5.38 $ 2.94 - Class A

Diluted earningsper common share $ 2.58 $ 1.99 $ 5.24 $ 2.86 - Class A

Basic earningsper common share $ 2.41 $ 1.86 $ 4.89 $ 2.68 - Class B

Diluted earningsper common share $ 2.41 $ 1.86 $ 4.89 $ 2.68 - Class B



Additionalselected information:

Depreciation andamortization $ 30,327 $ 28,993 $ 60,206 $ 57,357 expense

Rent expense $ 2,981 $ 2,309 $ 5,678 $ 4,967



Condensed Consolidated Balance Sheets (Unaudited)



March 27, Sept. 26,

2021 2020

ASSETS

Cash and cash $ 8,857 $ 6,904 equivalents

Receivables-net 88,801 81,358

Inventories 386,588 366,824

Other current 12,749 15,100 assets

Property and 1,359,255 1,354,490 equipment-net

Other assets 76,325 74,623

TOTAL ASSETS $ 1,932,575 $ 1,899,299



LIABILITIES ANDSTOCKHOLDERS' EQUITY

Currentmaturities of $ 19,365 $ 19,306 long-term debt

Accountspayable, accrued expenses and

current portionof other 274,660 304,507 long-termliabilities

Deferred income 76,517 73,334 taxes

Long-term debt 628,435 586,198

Other long-term 87,562 96,623 liabilities

Total 1,086,539 1,079,968 Liabilities

Stockholders' 846,036 819,331 equity

TOTAL LIABILITIES AND

STOCKHOLDERS' $ 1,932,575 $ 1,899,299 EQUITY

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005088/en/

CONTACT: Ron Freeman, Chief Financial Officer rfreeman@ingles-markets.com (828) 669-2941 (Ext. 223)