Exhibit 99.1
Ingles Markets, Incorporated Announces Second Quarter Sales and
Earnings Increases
ASHEVILLE, N.C., April 26 /PRNewswire-FirstCall/ -- Ingles Markets,
Incorporated (Nasdaq: IMKTA) today reported both sales and earnings increases
for its second quarter ended March 27, 2004 over the comparable 2003 period.
Net income for the March 2004 quarter increased to $7.2 million, or $0.31
per diluted share, compared to $1.8 million, or $0.08 per diluted share, for the
March 2003 quarter. Net income for the March 2004 six-month period increased to
$9.0 million, or $0.39 per diluted share, compared to $5.0 million, or $0.22 per
diluted share, for the March 2003 six-month period. The March 2003 quarter and
six-month period included the effect of an after-tax charge of $1.6 million or
$0.07 per share for the adoption of a new accounting pronouncement (EITF 02-16)
which changed the accounting treatment of certain consideration received from
vendors.
Net sales for the March 2004 quarter increased 6.5% over the March 2003
quarter, while comparable store sales grew 5.6% for the same period. For the six
months ended March 27, 2004, net sales increased 7.2% over the 2003 period,
while comparable store sales grew 6.0%. At the beginning of fiscal 2004, Ingles
introduced its Ingles Advantage Savings and Reward Card designed to drive sales.
Gross profit for the March 2004 quarter increased 7.8% to 26.4% of sales,
compared to 26.1% of sales for the same quarter last year. Gross profit dollars
for the March 2004 six- month period increased 4.5%, but decreased as a
percentage of sales to 25.5%, compared to 26.2% for the same six-month period
last year. The March 2003 quarter and six-month period included a pre-tax charge
to cost of sales of $2.6 million for the adoption of the new accounting
pronouncement (EITF 02-16) mentioned above. The effect of the charge as a
percentage of sales was 0.5% in the March 2003 quarter and 0.3% in the March
2003 six-month period.
Operating and administrative expenses for the March 2004 quarter increased
in total dollars by 2.3% but decreased as a percentage of sales to 22.7%
compared to 23.7% in the March 2003 quarter. Operating and administrative
expenses for the March 2004 six-month period increased in total dollars by 2.3%
but decreased as a percentage of sales to 22.4% compared to 23.5% in the March
2003 six-month period. Operating and administrative expenses declined as a
percentage of sales due primarily to the increased sales volume. The March 2004
six-month period included operating expenses of approximately $1.4 million in
connection with the introduction of the Ingles Advantage Savings and Reward
Card.
Net rental income decreased $0.6 million for the March 2004 quarter and $1.2
million for the March 2004 six-month period from the comparable prior year
periods due primarily to the sale of shopping centers in September 2003 and
January 2004 in which Ingles was not a tenant.
Income from operations increased 47.8% for the quarter ended March 27, 2004,
over the prior year quarter. For the six-month 2004 period, income from
operations increased 15.6% over the prior year period. The 2003 fiscal periods
included the $2.6 million charge for the adoption of the new accounting
pronouncement (EITF 02-16).
Other income increased $2.9 million for the March 2004 quarter over the
March 2003 quarter due primarily to a gain on the sale of a shopping center. In
the March 2004 quarter, Ingles sold a shopping center in which it no longer
operated a store for a gain of $3.8 million, while in the March 2003 quarter
Ingles sold a shopping center in which it no longer operated a store for a gain
of $1.1 million. Other income increased $3.7 million in the March 2004 six-month
period compared to the March 2003 six-month period, due to the shopping center
sale and a sale of an outparcel to a drug store chain in the first quarter of
fiscal 2004.
Interest expense increased $1.2 million for the three months ended March 27,
2004, compared to the three months ended March 29, 2003, due primarily to the
issuance in May 2003 of an additional $100 million of the existing 8-7/8% Senior
Unsecured Subordinated Notes (the "Notes"), maturing December 2011. Interest
expense increased $2.3 million for the 2004 six- month period compared to the
2003 six-month period, due primarily to the issuance of the additional Notes.
During the March 2004 six-month period, Ingles completed two major
remodel/expansions and two minor remodels and closed one older store. In
addition, Ingles purchased four store sites, two shopping centers in which
Ingles is a tenant, and one free standing retail store leased to another
retailer. Capital expenditures for the March 2004 six-month period totaled $49.5
million. For the balance of the fiscal year, Ingles expects to open one new
store, complete one major remodel/expansion and open one replacement store.
Capital expenditures for the entire fiscal year are expected to be approximately
$70 million, including expenditures for stores to open in fiscal 2005.
Commenting on the results, Robert P. Ingle, chairman and chief executive
officer, stated, "We are obviously very pleased with our increases in sales and
earnings for the quarter. We have an enthusiastic team working together to
improve our business by both driving sales and managing expenses. Performance
was excellent in our grocery operations and once again our real estate value was
demonstrated by the gain on the sale of the shopping center."
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. 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 2003 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 197 supermarkets. In conjunction with its supermarket
operations, the Company also operates 76 neighborhood shopping centers, all but
16 of which contain an Ingles supermarket. The Company's Class A Common Stock is
traded on The Nasdaq Stock Market's National Market under the symbol IMKTA. For
more information about the Company, visit Ingles' website at
www.ingles-markets.com .
INGLES MARKETS, INCORPORATED
(Amounts in thousands except per share data)
Unaudited Financial Highlights
Three Months Ended Six Months Ended
Mar. 27, Mar. 29, Mar. 27, Mar. 29,
2004 2003 2004 2003
Net sales $521,059 $489,383 $1,055,394 $984,499
Gross profit 137,493 127,575 269,403 257,921
Operating and
administrative
expenses 118,427 115,823 236,553 231,160
Rental income, net 1,770 2,349 3,284 4,500
Income from operations 20,836 14,101 36,134 31,261
Other income, net 4,183 1,318 5,521 1,816
Income before interest
and income taxes 25,019 15,419 41,655 33,077
Interest expense 13,712 12,511 27,570 25,244
Income taxes 4,096 1,088 5,076 2,838
Net income $7,211 $ 1,820 $9,009 $4,995
Basic earnings per
common share $0.31 $0.08 $0.39 $0.22
Diluted earnings
per common share $0.31 $0.08 $0.39 $0.22
Additional selected
information:
Depreciation and
amortization expense $14,179 $12,705 $ 28,160 $25,114
Rent expense $7,563 $11,001 $ 15,557 $21,607
Condensed Consolidated Balance Sheets (Unaudited)
Mar. 27, Sept. 27,
2004 2003
ASSETS
Cash $44,195 $80,865
Receivables 34,311 31,014
Inventories 187,719 194,834
Other current assets 6,953 8,352
Property and equipment-net 754,706 740,834
Other assets 14,319 15,760
TOTAL ASSETS $1,042,203 $1,071,659
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term loans and current
maturities of long-term debt $31,191 $38,032
Accounts payable, accrued expenses
and current portion of other
long-term liabilities 126,885 144,587
Deferred income taxes 42,555 40,615
Long-term debt 588,858 602,932
Other long-term liabilities 1,892 1,930
Total Liabilities 791,381 828,096
Stockholders' equity 250,822 243,563
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,042,203 $1,071,659
SOURCE Ingles Markets, Inc.
-0- 04/26/2004
/CONTACT: Brenda S. Tudor, Vice President-Finance & Chief Financial Officer
of Ingles Markets, Inc., +1-828-669-2941 Ext. 223/
/First Call Analyst: /
/FCMN Contact: /
/Web site: http://www.ingles-markets.com /
(IMKTA)
CO: Ingles Markets, Inc.
ST: North Carolina
IN: REA FOD SUP
SU: ERN