ASHEVILLE, N.C.--(BUSINESS WIRE)--Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported increased sales and net income for the three months ended December 26, 2020.
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 are pleased with our results and we all continue to work hard to provide a safe and reliable shopping environment for our associates and customers. We are also honored to participate in the COVID-19 vaccine distribution.”
First Quarter Results
Net sales totaled $1.19 billion for the quarter ended December 26, 2020, an increase of 10.4% compared with $1.08 billion for the quarter ended December 28, 2019.
Gross profit for the first quarter of fiscal 2021 totaled $314.2 million, or 26.4% of sales. Gross profit for the first quarter of fiscal 2020 was $257.5 million, or 23.9% of sales.
Operating and administrative expenses for the December 2020 quarter totaled $238.2 million compared with $222.0 million for the December 2019 quarter. Most of the increase was due to higher personnel costs incurred to support additional safety measures related to the pandemic.
Interest expense totaled $6.4 million for the first quarter of fiscal 2021 compared with $11.9 million for the first quarter of fiscal 2020. Total debt at the end of December 2020 was $587.9 million compared with $850.0 million at the end of December 2019. The Company continues to reduce higher rate debt and has refinanced debt at lower rates over the past twelve months. During the December 2019 quarter, the Company incurred $3.7 million of debt extinguishment costs associated with $155 million of early repayment of debt.
Net income totaled $53.8 million for the December 2020 quarter compared with $17.7 million for the December 2019 quarter. Basic and diluted earnings per share for Class A Common Stock were $2.73 and $2.66, respectively, for the quarter ended December 26, 2020, compared with $0.90 and $0.87, respectively, for the quarter ended December 28, 2019.
Capital expenditures for the December 2020 quarter totaled $34.2 million compared with $31.1 million for the December 2019 quarter. Capital expenditures are focused on stores that opened this fiscal year as well as stores scheduled to open later.
The Company currently has $148.9 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.
Ingles Markets, Incorporated is a leading grocer with operations in six southeastern states. Headquartered in Asheville, North Carolina, the Company operates 197 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 |
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(Amounts in thousands except per share data) |
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Unaudited Financial Highlights |
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Condensed Consolidated Statements of Income (Unaudited) |
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Quarter Ended |
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December 26, |
|
December 28, |
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|
2020 |
|
2019 |
|||
Net sales |
$ |
1,190,443 |
$ |
1,078,355 |
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Gross profit |
|
314,188 |
|
257,490 |
||
Operating and administrative expenses |
|
238,199 |
|
221,979 |
||
Gain from sale or disposal of assets |
|
452 |
|
2,964 |
||
Income from operations |
|
76,441 |
|
38,475 |
||
Other income, net |
|
692 |
|
197 |
||
Interest expense |
|
6,401 |
|
11,949 |
||
Loss on early extinguishment of debt |
|
--- |
|
3,719 |
||
Pretax Income |
|
70,732 |
|
23,004 |
||
Income tax expense |
|
16,908 |
|
5,317 |
||
Net income |
$ |
53,824 |
$ |
17,687 |
||
Basic earnings per common share – Class A |
$ |
2.73 |
$ |
0.90 |
||
Diluted earnings per common share – Class A |
$ |
2.66 |
$ |
0.87 |
||
Basic earnings per common share – Class B |
$ |
2.48 |
$ |
0.82 |
||
Diluted earnings per common share – Class B |
$ |
2.48 |
$ |
0.82 |
||
Additional selected information: |
|
|
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Depreciation and amortization expense |
$ |
29,879 |
$ |
28,434 |
||
Rent expense |
$ |
2,698 |
$ |
2,674 |
||
|
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Condensed Consolidated Balance Sheets (Unaudited) |
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December 26, |
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September 26, |
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|
2020 |
|
2020 |
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ASSETS |
|
|
||||
Cash and cash equivalents |
$ |
10,006 |
$ |
6,904 |
||
Receivables-net |
|
100,948 |
|
81,358 |
||
Inventories |
|
373,547 |
|
366,824 |
||
Other current assets |
|
13,485 |
|
15,100 |
||
Property and equipment-net |
|
1,354,607 |
|
1,354,490 |
||
Other assets |
|
75,907 |
|
74,623 |
||
TOTAL ASSETS |
$ |
1,928,500 |
$ |
1,899,299 |
||
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
||||
Current maturities of long-term debt |
$ |
19,320 |
$ |
19,306 |
||
Accounts payable, accrued expenses and current portion of other long-term liabilities |
|
299,051 |
|
304,507 |
||
Deferred income taxes |
|
74,438 |
|
73,334 |
||
Long-term debt |
|
568,628 |
|
586,198 |
||
Other long-term liabilities |
|
95,072 |
|
96,623 |
||
Total Liabilities |
|
1,056,509 |
|
1,079,968 |
||
Stockholders' equity |
|
871,991 |
|
819,331 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
1,928,500 |
$ |
1,899,299 |
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