INGLES MARKETS INC [IMKTA] Filings

10-Q 1 imkt-20230624x10q.htm 10-Q imkt-20230624x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 24, 2023

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-14706.

INGLES MARKETS, INCORPORATED

(Exact name of registrant as specified in its charter)


North Carolina		56-0846267
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
P.O. Box 6676, Asheville NC		28816
(Address of principal executive offices)		(Zip Code)

(828) 669-2941

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.05 par value per share	IMKTA	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer x	Accelerated Filer ¨
Non-Accelerated Filer ¨	Smaller Reporting Company ¨
	Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x.

As of August 1, 2023, the registrant had 14,494,975 shares of Class A Common Stock, $0.05 par value per share, outstanding and 4,499,401 shares of Class B Common Stock, $0.05 par value per share, outstanding.

‎

INGLES MARKETS, INCORPORATED

INDEX



		Page No.
Part I – Financial Information

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of June 24, 2023 and September 24, 2022		3

Condensed Consolidated Statements of Income and Comprehensive Income for the
Three Months Ended June 24, 2023 and June 25, 2022		4
Nine Months Ended June 24, 2023 and June 25, 2022		5

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months and Nine Months Ended June 24, 2023 and June 25, 2022		6

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 24, 2023 and June 25, 2022		7

Notes to Unaudited Interim Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14

Item 3. Quantitative and Qualitative Disclosures About Market Risk		21

Item 4. Controls and Procedures		21

Part II – Other Information

Item 5. Other Information		22

Item 6. Exhibits		22

Signatures		23

‎

Part I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

INGLES MARKETS, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)



	June 24,		September 24,
	2023		2022
ASSETS
Current Assets:
Cash and cash equivalents	$	280,744,832	$	267,198,517
Receivables - net		100,824,097		97,157,614
Inventories		481,958,452		457,945,539
Other current assets		33,173,758		15,830,032
Total Current Assets		896,701,139		838,131,702
Property and Equipment - Net		1,421,958,457		1,374,031,169
Operating lease right of use assets		40,995,235		38,594,968
Other Assets		47,498,544		44,752,886
Total Assets	$	2,407,153,375	$	2,295,510,725

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt	$	17,529,304	$	17,620,789
Current portion of operating lease liabilities		7,187,537		7,797,975
Accounts payable - trade		203,833,499		213,388,385
Accrued expenses and current portion of other long-term liabilities		84,640,941		94,969,902
Total Current Liabilities		313,191,281		333,777,051
Deferred Income Taxes		69,266,000		73,578,000
Long-Term Debt		535,911,247		554,287,420
Noncurrent operating lease liabilities		35,809,452		32,794,609
Other Long-Term Liabilities		45,656,819		41,479,220
Total Liabilities		999,834,799		1,035,916,300
Stockholders’ Equity
Preferred stock, $0.05 par value; 10,000,000 shares authorized; no shares issued		—		—
Common stock:
Class A, $0.05 par value; 150,000,000 shares authorized; ‎14,415,250 shares issued and outstanding June 24, 2023; ‎14,377,575 shares issued and outstanding at September 24, 2022		720,763		718,879
Class B, convertible to Class A, $0.05 par value; ‎100,000,000 shares authorized; ‎4,579,126 shares issued and outstanding June 24, 2023; ‎4,616,801 shares issued and outstanding at September 24, 2022		228,956		230,840
Paid-in capital in excess of par value		—		—
Accumulated other comprehensive income		11,154,615		12,406,551
Retained earnings		1,395,214,242		1,246,238,155
Total Stockholders’ Equity		1,407,318,576		1,259,594,425
Total Liabilities and Stockholders’ Equity	$	2,407,153,375	$	2,295,510,725

See notes to unaudited condensed consolidated financial statements.

‎

INGLES MARKETS, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)



	Three Months Ended
	June 24,		June 25,
	2023		2022
Net sales	$	1,433,868,605	$	1,458,166,802
Cost of goods sold		1,095,767,991		1,106,287,695
Gross profit		338,100,614		351,879,107
Operating and administrative expenses		270,911,362		257,342,642
Gain from sale or disposal of assets		116,182		26,660
Income from operations		67,305,434		94,563,125
Other income, net		2,114,798		1,208,422
Interest expense		5,441,689		5,285,639
Income before income taxes		63,978,543		90,485,908
Income tax expense		15,719,000		22,723,000
Net income	$	48,259,543	$	67,762,908

Other comprehensive income:
Change in fair value of interest rate swap	$	2,536,797	$	4,341,122
Income tax expense		(619,000)		(1,060,000)
Other comprehensive income, net of tax		1,917,797		3,281,122
Comprehensive income	$	50,177,340	$	71,044,030

Per share amounts:
Class A Common Stock
Basic earnings per common share	$	2.60	$	3.65
Diluted earnings per common share	$	2.54	$	3.57
Class B Common Stock
Basic earnings per common share	$	2.36	$	3.32
Diluted earnings per common share	$	2.36	$	3.32
Cash dividends per common share
Class A Common Stock	$	0.165	$	0.165
Class B Common Stock	$	0.150	$	0.150

See notes to unaudited condensed consolidated financial statements.

‎

INGLES MARKETS, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)



	Nine Months Ended
	June 24,		June 25,
	2023		2022
Net sales	$	4,307,786,852	$	4,226,814,981
Cost of goods sold		3,272,591,387		3,175,829,075
Gross profit		1,035,195,465		1,050,985,906
Operating and administrative expenses		815,980,784		772,167,222
Gain from sale or disposal of assets		1,493,484		1,235,886
Income from operations		220,708,165		280,054,570
Other income, net		5,290,862		4,144,746
Interest expense		16,133,198		16,125,044
Income before income taxes		209,865,829		268,074,273
Income tax expense		51,695,000		65,481,000
Net income	$	158,170,829	$	202,593,273

Other comprehensive (loss) income:
Change in fair value of interest rate swap	$	(1,656,936)	$	16,104,422
Income tax benefit (expense)		405,000		(3,934,000)
Other comprehensive (loss) income, net of tax		(1,251,936)		12,170,422
Comprehensive income	$	156,918,893	$	214,763,694

Per share amounts:
Class A Common Stock
Basic earnings per common share	$	8.51	$	10.91
Diluted earnings per common share	$	8.33	$	10.67
Class B Common Stock
Basic earnings per common share	$	7.74	$	9.92
Diluted earnings per common share	$	7.74	$	9.92
Cash dividends per common share
Class A Common Stock	$	0.495	$	0.495
Class B Common Stock	$	0.450	$	0.450

See notes to unaudited condensed consolidated financial statements.

‎

INGLES MARKETS, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

THREE AND NINE MONTHS ENDED JUNE 24, 2023 AND JUNE 25, 2022



							Paid-in		Accumulated
	Class A			Class B			Capital in		Other
	Common Stock			Common Stock			Excess of		Comprehensive		Retained
	Shares	Amount		Shares	Amount		Par Value		Income (Loss)		Earnings		Total
Balance, September 25, 2021	14,271,335	$	713,567	4,723,041	$	236,152	$	—	$	(3,426,140)	$	985,734,959	$	983,258,538
Net income	—		—	—		—		—		—		66,189,018		66,189,018
Other comprehensive income, net of income tax	—		—	—		—		—		1,410,887		—		1,410,887
Cash dividends	—		—	—		—		—		—		(3,063,227)		(3,063,227)
Common stock conversions	33,300		1,665	(33,300)		(1,665)		—		—		—		—
Balance, December 25, 2021	14,304,635	$	715,232	4,689,741	$	234,487	$	—	$	(2,015,253)	$	1,048,860,750	$	1,047,795,216
Net income	—		—	—		—		—		—		68,641,347		68,641,347
Other comprehensive income, net of income tax	—		—	—		—		—		7,478,413		—		7,478,413
Cash dividends	—		—	—		—		—		—		(3,063,727)		(3,063,727)
Common stock conversions	20,600		1,030	(20,600)		(1,030)		—		—		—		—
Balance, March 26, 2022	14,325,235	$	716,262	4,669,141	$	233,457	$	—	$	5,463,160	$	1,114,438,370	$	1,120,851,249
Net income	—		—	—		—		—		—		67,762,908		67,762,908
Other comprehensive income, net of income tax	—		—	—		—		—		3,281,122		—		3,281,122
Cash dividends	—		—	—		—		—		—		(3,064,036)		(3,064,036)
Common stock conversions	47,175		2,359	(47,175)		(2,359)		—		—		—		—
Balance, June 25, 2022	14,372,410	$	718,621	4,621,966	$	231,098	$	—	$	8,744,282	$	1,179,137,242	$	1,188,831,243

Balance, September 24, 2022	14,377,575	$	718,879	4,616,801	$	230,840	$	—	$	12,406,551	$	1,246,238,155	$	1,259,594,425
Net income	—		—	—		—		—		—

INGLES MARKETS INC [IMKTA] Filings
10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-Q	[2023-02-02]
10-K	[2022-11-23]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-Q	[2022-02-03]
10-K	[2021-11-24]
10-Q	[2021-08-05]
10-Q	[2021-05-05]
10-Q	[2021-02-04]
10-K	[2020-12-08]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-Q	[2020-02-06]
10-K	[2019-12-10]
10-Q	[2019-08-08]
10-Q	[2019-05-08]
10-Q	[2019-02-07]
10-K	[2018-12-07]
10-Q	[2018-08-09]
10-Q	[2018-05-09]
10-Q	[2018-02-08]
10-K	[2017-12-06]
10-Q	[2017-08-02]
10-Q	[2017-05-03]
10-Q	[2017-02-01]
10-K	[2016-12-16]
10-Q	[2016-08-03]
10-Q	[2016-05-05]
10-Q	[2016-02-04]
10-K	[2015-12-10]
10-Q	[2015-08-04]
10-Q	[2015-05-06]
10-Q	[2015-02-05]
10-K	[2014-12-16]
10-Q	[2014-08-07]
10-Q	[2014-05-06]
10-Q	[2014-02-04]
10-K	[2013-12-12]
10-Q	[2013-08-06]
10-Q	[2013-05-08]
10-Q	[2013-02-07]
10-K	[2012-12-26]
10-Q	[2012-08-01]
10-Q	[2012-05-03]
10-Q	[2012-01-30]