Exhibit 99.1
Ingles Markets, Incorporated Reports Increased
Sales and Income for First Quarter 2007
ASHEVILLE, N.C.--(BUSINESS WIRE)--Feb. 1, 2007--Ingles Markets,
Incorporated (NASDAQ: IMKTA) today reported a 44% increase in net
income and a 10% increase in net sales for its first fiscal quarter
ended December 30, 2006. For the December 2006 quarter, net income
increased $3.4 million to $11.2 million, compared with net income of
$7.8 million for the quarter ended December 2005.
Commenting on the results, Robert P. Ingle, chief executive
officer, said, "Holiday-related sales were very strong for us this
quarter. Our customers benefited from our combination of promotions,
every day low pricing and convenience."
Financial Results
Net sales increased 10.0% to $685.7 million for the quarter ended
December 30, 2006 compared with $623.4 million for the quarter ended
December 24, 2005. Sales increased in every major department, led by
increases in the gasoline, pharmacy and deli departments. Grocery
segment comparable store sales growth was 10.4%. Both average weekly
customer visits and the average purchase amount increased over the
comparative first quarters.
Excluding gasoline sales, first quarter fiscal 2007 net sales
increased 7.1% and grocery segment comparable store sales increased
7.4% compared with the first quarter of fiscal 2006. Gasoline gallons
sold increased by 70.1% and the average sales price per gallon
decreased approximately 18 cents compared with the first quarter of
fiscal 2006.
Gross profit for the first quarter of fiscal 2007 increased 6.7%
to $164.9 million, an increase of $10.4 million compared with the
first quarter of fiscal 2006. Gross profit as a percentage of sales
was 24.0% for the first quarter of fiscal 2007 compared with 24.7% for
the first quarter of fiscal 2006. Excluding lower margin gasoline
sales, grocery segment gross profit as a percentage of sales was level
with last year at 26.3% in the first quarter of fiscal 2007 compared
with 26.4% for the first quarter of fiscal 2006.
Operating expenses decreased as a percentage of sales to 19.9% for
the first fiscal 2007 quarter compared with 21.0% for the first fiscal
2006 quarter. Most of this percentage decrease is attributable to
leveraging more sales over the Company's cost structure, including
labor costs. Moderating energy costs and decreases in equipment
expenses, professional fees and insurance also contributed.
Net rental income and other income decreased by a combined $0.4
million in the first fiscal 2007 quarter compared with the first
fiscal 2006 quarter. Higher real estate operating costs and losses on
assets taken out of service accounted for much of the decline.
Interest expense decreased $0.3 million for the three-month period
ended December 30, 2006 to $12.0 million compared with $12.3 million
for the three-month period ended December 24, 2005. Total debt at
December 2006 was $556.1 million compared with $564.3 million at
December 2005. Available borrowings under the Company's lines of
credit totaled $126.2 million and the book value of unencumbered
property totaled approximately $486.8 million at December 30, 2006.
Net income for the December 2006 quarter totaled $11.2 million,
43.7% higher than net income of $7.8 million for the December 2005
quarter. Basic and diluted earnings per share for the Company's
publicly traded Class A common stock were $0.48 and $0.46 per share,
respectively, for the December 2006 quarter compared with $0.33 and
$0.32 per share, respectively, for the December 2005 quarter.
Capital expenditures totaled $19.2 million for the first quarter
of fiscal year 2007. During the first quarter, Ingles opened one new
store, closed one store, completed one major remodel, and added one
fuel/convenience center and two fuel centers at existing store
locations. Ingles' capital expenditure plans for fiscal 2007 include
investments of approximately $100 million. For the balance of this
fiscal year, the Company plans to open three new or replacement
stores, remodel three stores and add fuel stations at 13 existing
stores.
During the first quarter of fiscal 2007, closing prices for
Ingles' publicly traded Class A common stock ranged from $25.64 to
$30.22 per share. During January 2007, the Class A common stock
reached an all-time high closing price of $36.81 per share. According
to Supermarket News, Ingles' Class A common stock increased 90.4%
during calendar year 2006, an increase that ranked second out of
twenty-seven supermarket stocks tracked by the publication. The Class
A common stock pays dividends of $0.66 per share annually. Robert P.
Ingle, chief executive officer, said, "We appreciate the market's
recognition of our strong financial results following a number of
relatively flat years for our stock price. Last year marked our 42nd
consecutive year of sales growth and this quarter's results are
setting the pace for another excellent year."
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 2006 Form 10-K and Form 10-Q for the quarter
ended December 30, 2006.
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 74
neighborhood shopping centers, all but 19 of which contain an Ingles
supermarket. The Company's Class A Common Stock is traded on The
NASDAQ Stock Market's Global Market under the symbol IMKTA. For more
information, visit Ingles' website at www.ingles-markets.com.
INGLES MARKETS, INCORPORATED
(Amounts in thousands except per share data)
Unaudited Financial Highlights
Condensed Consolidated Statements of Income (Unaudited)
Quarter Ended
-----------------------
Dec. 30, Dec. 24,
2006 2005
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Net sales $685,699 $623,394
Gross profit 164,863 154,487
Operating and administrative expenses 136,464 131,414
Rental income, net 1,023 1,284
Income from operations 29,422 24,357
Other income, net 609 740
Interest expense 12,006 12,327
Income taxes 6,857 5,000
Net income $11,168 $7,770
Basic earnings per common share - Class A $0.48 $0.33
Diluted earnings per common share - Class A $0.46 $0.32
Basic earnings per common share - Class B $0.43 $0.30
Diluted earnings per common share - Class B $0.43 $0.30
Additional selected information:
Depreciation and amortization expense $15,152 $14,755
Rent expense $4,532 $6,129
Condensed Consolidated Balance Sheets (Unaudited)
Dec. 30, Sept. 30,
2006 2006
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ASSETS
Cash and cash equivalents $11,478 $17,540
Receivables-net 46,481 43,594
Inventories 231,333 215,369
Other current assets 9,714 9,315
Property and equipment-net 774,833 771,628
Other assets 10,071 17,528
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TOTAL ASSETS $1,083,910 $1,074,974
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $52,385 $33,666
Accounts payable, accrued expenses and
current portion of other long-term
liabilities 189,111 185,195
Deferred income taxes 20,609 22,673
Long-term debt 503,672 522,649
Other long-term liabilities 5,984 6,118
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Total Liabilities 771,760 770,301
Stockholders' equity 312,150 304,673
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,083,910 $1,074,974
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CONTACT: Ingles Markets
Ron Freeman, 828-669-2941 Ext. 223
Chief Financial Officer