ASHEVILLE, N.C.--(BUSINESS WIRE)--Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported higher sales and net income for the three months ended December 30, 2017, compared with the three months ended December 24, 2016. Total sales rose 3.2% over the comparative quarters. Net income totaled $45.1 million for the quarter ended December 30, 2017, compared with $13.8 million for the quarter ended December 24, 2016. Included in current quarter net income is a reduction in non-cash deferred tax expense of $26.7 million from changes to federal income tax law.
Robert P. Ingle II, Chairman of the Board, stated, “We are pleased with our sales during the important holiday season. We opened two new stores and will continue to invest capital, improve our store base, and bring the best to our loyal customers.”
First Quarter Results
Net sales totaled $1.01 billion for the quarter ended December 30, 2017, compared with $982.8 million for the quarter ended December 24, 2016, an increase of $31.0 million. Comparable store sales, excluding gasoline, increased 2.2%. Gasoline gallons sold increased while the average price per gallon was stable comparing the December 2017 quarter with the December 2016 quarter. The number of customer transactions (excluding gasoline) was stable, while the comparable average transaction size (excluding gasoline) increased compared with the same quarter last year.
Gross profit for the December 2017 quarter rose to $244.7 million, or 24.1% of sales. Gross profit for the December 2016 quarter was $237.1 million, also 24.1% of sales. Retail gross margin (excluding gasoline) was unchanged comparing the December 2017 quarter with the December 2016 quarter.
Operating and administrative expenses for the December 2017 quarter totaled $208.8 million, compared with $206.3 million for the December 2016 quarter. Increased personnel costs accounted for much of the increase. The 1.2% increase in operating expenses over the comparative quarters was less than the increase in sales and gross profit.
Interest expense totaled $11.5 million for the three-month period ended December 30, 2017, compared with $11.3 million for the three-month period ended December 24, 2016. Total debt at the end of December 2017 was $890.5 million, compared with $900.2 million at the end of December 2016.
Basic and diluted earnings per share for Class A Common Stock were $2.29 and $2.23, respectively, for the quarter ended December 30, 2017, compared with $0.70 and $0.68 per share, respectively, for the quarter ended December 24, 2016. Basic and diluted earnings per share for Class B Common Stock were each $2.08 for the quarter ended December 30, 2017, compared with $0.64 per basic and diluted Class B share for the quarter ended December 24, 2016.
Capital expenditures totaled $56.8 million for the December 2017 quarter, compared with $29.3 million for the December 2016 quarter. The increase is primarily attributable to the timing of capital expenditures on real estate, new stores, and store remodels. Total fiscal 2018 capital expenditures are expected to be between $120 million and $160 million.
The Company currently has a line of credit totaling $175.0 million, of which $150.8 million is currently available. The Company believes its financial resources, including this 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.
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 2017 Form 10-K.
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.
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INGLES MARKETS, INCORPORATED |
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| (Amounts in thousands except per share data) | ||||||||
| Unaudited Financial Highlights | ||||||||
| Condensed Consolidated Statements of Income (Unaudited) | ||||||||
| Quarter Ended | ||||||||
| December 30, | December 24, | |||||||
| 2017 | 2016 | |||||||
| Net sales | $ | 1,013,786 | $ | 982,758 | ||||
| Gross profit | 244,660 | 237,084 | ||||||
| Operating and administrative expenses | 208,828 | 206,296 | ||||||
| Gain from sale or disposal of assets | 57 | 1,378 | ||||||
| Income from operations | 35,889 | 32,166 | ||||||
| Other income, net | 954 | 663 | ||||||
| Interest expense | 11,452 | 11,312 | ||||||
| Income taxes | (19,756 | ) | 7,693 | |||||
| Net income | $ | 45,147 | $ | 13,824 | ||||
| Basic earnings per common share – Class A | $ | 2.29 | $ | 0.70 | ||||
| Diluted earnings per common share – Class A | $ | 2.23 | $ | 0.68 | ||||
| Basic earnings per common share – Class B | $ | 2.08 | $ | 0.64 | ||||
| Diluted earnings per common share – Class B | $ | 2.08 | $ | 0.64 | ||||
| Additional selected information: | ||||||||
| Depreciation and amortization expense | $ | 27,990 | $ | 27,080 | ||||
| Rent expense | $ | 3,283 | $ | 3,365 | ||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| December 30, | September 30, | |||||||
| 2017 | 2017 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 13,755 | $ | 23,912 | ||||
| Receivables-net | 71,514 | 66,329 | ||||||
| Inventories | 361,627 | 349,333 | ||||||
| Other current assets | 8,681 | 6,266 | ||||||
| Property and equipment-net | 1,292,456 | 1,265,112 | ||||||
| Other assets | 25,629 | 22,354 | ||||||
| TOTAL ASSETS | $ | 1,773,662 | $ | 1,733,306 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current portion of long-term debt | $ | 12,672 | $ | 12,211 | ||||
| Accounts payable, accrued expenses and current portion of other long-term liabilities | 239,370 | 233,353 | ||||||
| Deferred income taxes | 47,106 | 69,918 | ||||||
| Long-term debt | 877,869 | 865,660 | ||||||
| Other long-term liabilities | 43,696 | 41,112 | ||||||
| Total Liabilities | 1,220,713 | 1,222,254 | ||||||
| Stockholders' equity | 552,949 | 511,052 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,773,662 | $ | 1,733,306 | ||||
