What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-11-29 compared with 2022-11-23 · 100 added, 105 removed, 768 unchanged (21% of the section changed)

4 unchanged sentences

It should be noted that the Company’s system of controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 24, 2022, the end of the period covered by this report.

Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable level as of September 24, 2022.

As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 30, 2023, the end of the period covered by this Annual Report on Form 10-K.

Management’s Annual Report on Internal Control Over Financial Reporting

17 unchanged sentences

OTHER INFORMATION

During the three-month period ended September 30, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement”, as defined in Item 408 of Regulation S-K.

[In addition, during the three-month period ended September 30, 2023, we did not adopt or terminate any Rule 10b5-1 trading arrangement.]

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

4 unchanged sentences

The Company has adopted a Code of Ethics that applies to its senior financial officers, including without limitation, its Chief Executive Officer, Chief Financial Officer and Controller.

The full text of the Code of Ethics is published on the Company’s website at www.ingles-markets.com under the caption “Corporate Information.” In the event that the Company makes any amendments to, or grants any waivers of, a provision of the Code of Ethics applicable to its principal executive officer, principal financial officer or

principal accounting officer, the Company intends to disclose such amendment or waiver on its website.

Information on the Company’s website, however, does not form a part of this Annual Report on Form 10-K.

146 unchanged sentences

Cash and cash equivalents

Short term investments

Receivables (less allowance for doubtful accounts of $ 143,753 – 2023 and

11 unchanged sentences

Current portion of operating lease liabilities

Current portion of finance lease liabilities

Accounts payable - trade

4 unchanged sentences

NONCURRENT OPERATING LEASE LIABILITIES

NONCURRENT FINANCE LEASE LIABILITIES

OTHER LONG-TERM LIABILITIES

6 unchanged sentences

10,000,000 shares authorized;

no shares issued

no shares issued or outstanding

Common stocks:

2 unchanged sentences

issued and outstanding,

14,377,575 shares in 2022, 14,271,335 shares in 2021

‎ 14,497,075 shares for 2023, 14,377,575 shares for 2022

Class B, convertible to Class A, $ 0.05 par value;

100,000,000 shares authorized;

issued and outstanding, 4,616,801 shares in 2022, 4,723,041 shares in 2021

‎ issued and outstanding, 4,497,301 shares for 2023, 4,616,801 shares for 2022

Paid-in capital in excess of par value

Accumulated other comprehensive income

( 3,426,140 )

Retained earnings

1,444,788,790

1,246,238,155

Total stockholders’ equity

1,458,972,140

1,259,594,425

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

18 unchanged sentences

1,115,380,833

1,040,193,885

Gain from sale or disposal of assets

5 unchanged sentences

Income tax expense

Other comprehensive income (expense):

Other comprehensive income:

Change in fair value of interest rate swap

( 11,887,660 )

Income tax (expense) benefit

( 5,119,000 )

Income tax expense

( 5,119,000 )

Other comprehensive income (expense), net of tax

( 2,206,000 )

Other comprehensive income, net of tax

Comprehensive income

15 unchanged sentences

( 10,251,296 )

Other comprehensive expense net of tax

Other comprehensive income net of tax

Cash dividends

( 9,396,169 )

Cash dividends

( 3,234,276 )

Stock repurchases, at cost

( 1,265,400 )

( 12,311,249 )

( 67,624,069 )

( 79,998,588 )

Common stock conversions

7 unchanged sentences

( 2,805,583 )

Stock repurchases, at cost

( 1,265,400 )

( 12,311,249 )

( 67,624,069 )

( 79,998,588 )

Common stock conversions

1 unchanged sentence

1,246,238,155

1,259,594,425

Other comprehensive income net of tax

24 unchanged sentences

Receipt of advance payments on purchases contracts

Recognition of advance payments on purchases contracts

Recognition of advance payments on purchase contracts

( 3,156,909 )

4 unchanged sentences

( 4,309,000 )

( 2,772,000 )

Changes in operating assets and liabilities

6 unchanged sentences

( 10,743,707 )

( 3,948,861 )

Operating lease liabilities

7 unchanged sentences

Proceeds from sales of property and equipment

Purchase of short term investments

Purchase from short term investments

( 110,210,267 )

13 unchanged sentences

( 692,507,850 )

( 73,951,369 )

Debt issuance costs

1 unchanged sentence

Proceeds from issuance of bonds

Proceeds from new long-term borrowings

Repayment of Financing Lease

Principal payments on long-term borrowings

2 unchanged sentences

( 327,812,521 )

Prepayment penalties on debt extinguishment

( 5,366,350 )

Stock repurchases

7 unchanged sentences

( 114,902,457 )

Increase (decrease) in Cash and Cash Equivalents

( 35,221,150 )

Increase in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

5 unchanged sentences

Summary of Significant Accounting Policies

Nature of Operations – Ingles Markets, Incorporated (“Ingles” or the “Company”), is a leading supermarket chain in the southeast United States, operates 198 supermarkets in North Carolina ( 75 ), Georgia ( 65 ), South Carolina ( 35 ), Tennessee ( 21 ), Virginia ( 1 ) and Alabama ( 1 ).

Nature of Operations – Ingles Markets, Incorporated (“Ingles” or the “Company”), a leading supermarket chain in the southeast United States, operates 198 supermarkets in North Carolina ( 75 ), Georgia ( 65 ), South Carolina ( 35 ), Tennessee ( 21 ), Virginia ( 1 ) and Alabama ( 1 ).

Principles of Consolidation – The consolidated financial statements include the accounts of Ingles Markets, Incorporated and its wholly owned subsidiaries, Sky King, Inc., Ingles Markets Investments, Inc., Milkco, Inc., Land O Sky, LLC, Shopping Center Financing, LLC, and Shopping Center Financing II, LLC.

1 unchanged sentence

Fiscal Year – The Company’s fiscal year ends on the last Saturday in September.

Fiscal year 2023 was 53 weeks.

Fiscal years 2022 and 2021 each consisted of 52 weeks.

6 unchanged sentences

The ASU generally allows for hedge accounting to continue if the hedge was highly effective or met other standards prior to reference rate reform.

Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that exist as of March 12, 2020.

The relief provided in this ASU is only available for a limited time, currently through December 31, 2022.

The Company’s debt agreements and interest rate swaps that utilize LIBOR have not yet discontinued the use of LIBOR and, therefore, this ASU is not yet effective for us.

To the extent our debt and interest rate swap arrangements change to another accepted rate within the timeline provided by this ASU, we will utilize the relief in this ASU to continue hedge accounting.

Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that existed as of March 12, 2020.

The relief provided in this ASU extends through December 31, 2024.

Dollar LIBOR panel ceased following June 30, 2023, and the Company’s debt agreements and interest rate swaps that utilized LIBOR discontinued the use of LIBOR and adopted the Secured Overnight Financing Rate (“SOFR”), which did not materially impact our consolidated audited financial statements.

Cash and Cash Equivalents – Outstanding checks in excess of bank balances are included in the line item “Accounts payable – trade” on the Consolidated Balance Sheets.

There were no such balances at September 30, 2023 and September 24, 2022, respectively.

At September 24, 2022 demand deposits of approximately $ 262.3 million in five banks exceed the $ 250,000 FDIC insurance limit per bank.

Short Term Investments – From time to time, the Company purchases financial products that can be readily converted into cash and accounts for such financial products as short-term investments.

The financial products include money market funds, bonds, and mutual funds.

At September 30, 2023 demand deposits aggregating approximately $ 323.5 million in five banks exceed the $ 250,000 FDIC insurance limit per bank.

Short Term Investments – From time to time, the Company purchases financial products that can be readily converted into cash and the Company accounts for such financial products as short-term investments.

Financial products include money market funds, bonds, and mutual funds.

The carrying values of the Company’s short-term investments approximate fair value because of their liquidity.

Interest Rate Swaps – The Company utilizes interest rate swap contracts to reduce its exposure to fluctuations in variable interest rates for future interest payments on some of its debt instruments.

Interest Rate Swaps – The Company utilizes interest rate swap contracts to reduce its exposure to fluctuations in variable interest rates applicable to some of its debt instruments.

For determining the fair value of the interest rate swap contracts, the Company uses significant observable market data or assumptions about counterparty risk.

7 unchanged sentences

Store inventories are valued using the retail method under which inventories at cost (and the resulting gross margins) are determined by applying a calculated cost-to-retail ratio to the retail value of inventories.

As an integral part of valuing inventory at cost, management makes certain judgments and estimates for gross margins, allowances for vendor consideration,

markdowns and shrinkage.

As an integral part of valuing inventory at cost, management makes certain judgments and estimates for gross margins, allowances for vendor consideration, markdowns and shrinkage.

Warehousing and distribution costs are not included in the valuation of inventories.

22 unchanged sentences

Self-Insurance – The Company is self-insured for workers’ compensation, general liability and group medical and dental benefits.

Risks and uncertainties are associated with self-insurance;

There are risks and uncertainties associated with self-insurance;

however, the Company has limited its exposure by maintaining excess liability coverage of $ 1,000,000 per occurrence for workers’ compensation, and for general liability, and $ 500,000 per covered person for medical care benefits for a policy year.

3 unchanged sentences

The Company’s self-insurance reserves totaled $ 32.9 million and $ 31.0 million for employee group insurance, workers’ compensation insurance and general liability insurance at September 30, 2023 and September 24, 2022, respectively.

These amounts are inclusive of expected recoveries from excess cost insurance or other sources that are recorded as receivables of $ 4.0 million at September 24, 2022 and $ 4.2 million at September 25, 2021.

These amounts include expected recoveries from excess cost insurance or other sources of $ 4.3 million at September 30, 2023 and $ 4.0 million at September 24, 2022, and are recorded as receivables.

The Company is required in certain cases to pledge certificates of deposit or obtain surety bonds to support its self-insured status.

The Company carries casualty insurance only on those properties where it is required to do so.

The Company carries casualty insurance on only those properties for which it is required to do so.

The Company has elected to self-insure its other properties.

41 unchanged sentences

Vendor advertising allowances recorded as a reduction of advertising expense totaled $ 8.5 million, $ 7.1 million, and $ 8.1 million for the fiscal years ended September 30, 2023, September 24, 2022 and September 25, 2021, respectively.

During fiscal years 2022, 2021 and 2020, the COVID-19 pandemic increased the Company’s sales.

During fiscal years 2022 and 2021, the continuing effects of the COVID-19 pandemic contributed to an increase in the Company’s sales.

As a result, vendors offered a lower level of incentives for the Company to sell their products.

3 unchanged sentences

Deferred Income Tax Liabilities and Assets – Deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax laws and rates.

Significant components of the Company’s deferred tax liabilities and assets are as follows:

Significant components of the Company’s deferred tax liabilities and assets were as follows:

Deferred tax liabilities:

8 unchanged sentences

Deferred compensation

Interest rate swaps

Total deferred tax assets

2 unchanged sentences

Income Tax Expense - Income tax expense differs from the amounts computed by applying the statutory federal rates to income before income taxes.

The reasons for the differences are as follows:

The reasons for the differences were as follows:

Federal tax at statutory rate

3 unchanged sentences

( 1,500,000 )

Current and deferred income tax expense (benefit) is as follows:

( 1,700,000 )

Current and deferred income tax expense (benefit) was as follows:

Total current expense

1 unchanged sentence

( 3,565,000 )

( 2,482,000 )

Total deferred (benefit) expense

1 unchanged sentence

( 4,309,000 )

( 2,772,000 )

Total expense

Property and Equipment

Property and equipment, net, consists of the following:

Property and equipment, net, consisted of the following:

Construction in progress

6 unchanged sentences

Leasehold improvements

Finance lease right-of-use assets

3,111,221,259

8 unchanged sentences

At September 30, 2023, the Company owned and operated 93 shopping centers in conjunction with its supermarket operations.

The Company leases to others a portion of its shopping center properties.

The Company leases a portion of its shopping center properties to third parties.

The leases are non-cancelable operating lease agreements for periods ranging up to 20 years.

22 unchanged sentences

The Company conducts part of its retail operations from leased facilities.

The initial terms of the leases are generally 20 years.

The initial term of the leases is generally 20 years.

The majority of the leases include one or more renewal options and provide that the Company pay property taxes, utilities, repairs and certain other costs incidental to occupation of the premises.

6 unchanged sentences

Sub-lease rental income of $ 0.3 million for each of fiscal years 2023, 2022 and 2021, is included as a reduction of rental expense.

Maturities of operating lease liabilities as of September 24, 2022 are as follows:

Finance Leases – Finance lease cost of $ 270.7 thousand included amortization expense of $ 231.3 thousand, included in operating and administrative expense, and $ 87.2 thousand of interest expense for fiscal year 2023.

No finance lease cost was incurred during fiscal years 2022 and 2021.

Future maturities of lease liabilities as of September 30, 2023 were as follows:

Operating Leases

Finance Leases

Total lease payments

3 unchanged sentences

The weighted average remaining lease term for the Company’s operating leases is 12.2 years.

The weighted average discount rate used to determine lease liability balances as of September 24, 2022 is 3.51 %, based on our incremental borrowing rate.

New financing leases entered into during fiscal year 2023 increased the line item “Property and equipment” by $ 3.9 million and “Current portion of financing lease liabilities” by $ 0.6 million and “Noncurrent financing lease liabilities” by $ 3.1 million.

The weighted average discount rate used to determine operating lease liability balances as of September 30, 2023 was 5.5 %, and was 6.0 % for finance lease liability balances.

Supplementary Balance Sheet Information

14 unchanged sentences

General liability insurance

Interest rate swap liability

Other long-term liabilities

8 unchanged sentences

Long-Term Debt

Long-term debt and short-term loans are summarized as follows:

Long-term debt and short-term loans are as follows:

Bonds payable:

9 unchanged sentences

Long-term debt, net of current portion

In November 2019, the Company closed a $ 155 million amortizing loan secured by real estate (the “Loan”) and issued notice to redeem a like principal amount of the 2023 Notes.

The Loan was funded and the 2023 Notes were redeemed thirty days after the redemption notice in December 2019.

The 2023 Notes were redeemed at 101.917 % of par value, and the Company recognized debt extinguishment costs of approximately $ 3.7 million during the quarter ended December 28, 2019.

In June 2020, the Company issued an irrevocable notice to redeem $ 150 million principal amount of its 5.75 % senior notes due in 2023 (the “2023 Notes”).

The 2023 Notes were redeemed at 100.958 % of par value on July 9, 2020.

The Company recognized debt extinguishment costs of approximately $ 2.0 million during the quarter ended September 26, 2020.

In July 2020, the Company issued an irrevocable notice to redeem $ 100 million principal amount of the 2023 Notes.

The 2023 Notes were redeemed at 100.958 % of par value on August 27, 2020.

The Company recognized debt extinguishment costs of approximately $ 1.4 million during the quarter ended September 26, 2020.

Following this redemption, there was $ 295.0 million aggregate principal amount of the 2023 Notes outstanding.

In June 2021, the Company issued at par $ 350.0 million aggregate principal amount of 4.00 % senior notes due in 2031 (the “2031 Notes”).

Upon issuance of the 2031 Notes, the Company issued an irrevocable notice to redeem the remaining $ 295.0 million aggregate principal amount of its 2023 Notes and invested $ 295.0 million of 2031 Notes proceeds in short term investments pending redemption of the 2023 Notes.

The 2023 Notes were redeemed at par value on July 16, 2021.

The Company recognized debt extinguishment costs of approximately $ 1.1 million during fiscal year 2021.

The Company may redeem all or a portion of the 2031 Notes at any time at the following redemption prices (expressed as percentages of the principal amount), if redeemed during the 12-month period beginning June 15 of the years indicated below:

Dollar LIBOR panel ceased following June 30, 2023, and the Company’s debt agreements and interest rate swaps that utilized LIBOR discontinued the use of LIBOR and adopted SOFR, which did not materially impact our consolidated audited financial statements.

In June 2021, the Company issued at par $ 350.0 million aggregate principal amount of 4.00 % senior notes due 2031 (the “Notes”).

The Company may redeem all or a portion of the Notes at any time at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the 12-month periods beginning June 15 of the years indicated below:

2029 and thereafter

2 unchanged sentences

provided, that, after such redemption, at least 60 % of the aggregate principal amount of the 2031 Notes originally issued remains outstanding.

In June 2021, the Company entered into a $ 150.0 million line of credit (the “Line”) that matures in June 2026.

The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate, or LIBOR.

The Company has a $ 150.0 million line of credit (the “Line”) that matures in June 2026.

The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate or SOFR.

The Line allows the Company to issue up to $ 10.0 million in letters of credit, of which none were issued at September 30, 2023.

1 unchanged sentence

At September 30, 2023, the Company had no borrowings outstanding under the Line.

In December 2010, the Company completed the funding of $ 99.7 million of Recovery Zone Facility Bonds (the “Bonds”) for construction of new warehouse and distribution center to be located in Buncombe County, North Carolina (the “Project”).

In December 2010, the Company completed the funding of $ 99.7 million of Recovery Zone Facility Bonds (the “Bonds”) for construction of new warehouse and distribution space adjacent to its existing space in Buncombe County, North Carolina (the “Project”).

The final maturity date of the Bonds is January 1, 2036 .

Under a Continuing Covenant and Collateral Agency Agreement (the “Covenant Agreement”) between certain financial institutions and the Company, such financial institutions hold the Bonds until September 2026, subject to certain events.

Mandatory redemption

of the Bonds by the Company in the annual amount of $ 4.5 million began on January 1, 2014.

The Company may redeem the Bonds without penalty or premium at any time prior to September 26, 2026.

Mandatory redemption of the Bonds by the Company in the annual amount of $ 4.5 million began on January 1, 2014.

The Company may redeem the Bonds without penalty or premium at any time prior to December 17, 2029.

Interest earned by bondholders on the Bonds is exempt from Federal and North Carolina income taxation.

The interest rate on the Bonds is equal to one-month LIBOR (adjusted monthly) plus a credit spread, adjusted to reflect the income tax exemption.

The interest rate on the Bonds is equal to SOFR plus a credit spread, adjusted to reflect the income tax exemption.

The Company’s obligation to repay the Bonds is collateralized by the Project.

The Covenant Agreement incorporates substantially all financial covenants included in the Line.

The 2031 Notes, the Bonds and the Line contain provisions that under certain circumstances would permit lending institutions to terminate or withdraw their respective extensions of credit to the Company.

Included among the triggering factors permitting the termination or withdrawal of the Line to the Company are certain events of default, including both monetary and non-monetary defaults, the initiation of bankruptcy or insolvency proceedings, and the failure of the Company to meet certain financial covenants designated in its respective loan documents.

The Notes, the Bonds and the Line contain provisions that under certain circumstances would permit the acceleration of the indebtedness under such instruments or would otherwise permit lending institutions to terminate or withdraw their respective extensions of credit to the Company.

Included among the triggering factors permitting the termination or withdrawal of the Line are certain events of default, including both monetary and non-monetary defaults, the initiation of bankruptcy or insolvency proceedings, and the failure of the Company to meet certain financial covenants designated in its loan documents.

The Company was in compliance with all financial covenants related to the Notes, the Bonds and Line at September 30, 2023.

In September 2017, the Company refinanced approximately $ 60 million of secured borrowing obligations with a LIBOR-based amortizing floating rate loan secured by real estate maturing in October 2027.

In September 2017, the Company refinanced approximately $ 60 million of secured borrowing obligations with a SOFR-based amortizing floating rate loan secured by real estate, which matures in October 2027.

The Company has an interest rate swap agreement for a current notional amount of $ 24.5 million at a fixed rate of 3.962 %.

Under this agreement, the Company pays monthly the fixed rate of 3.92 % and receives the one-month LIBOR plus 1.65 %.

Under this agreement, the Company pays monthly the fixed rate of 3.962 % and receives the one-month SOFR plus 1.75 %.

The interest rate swap effectively hedges floating rate debt in the same amount as the current notional amount of the interest swap.

Both the floating rate debt and the interest rate swap have monthly principal amortization of $ 0.5 million and mature October 1, 2027 .

In December 2019, the Company closed a $ 155 million LIBOR-based amortizing floating rate loan secured by real estate maturing in January 2030.

In December 2019, the Company closed a $ 155 million SOFR-based amortizing floating rate loan secured by real estate, which matures in January 2030.

The Company has an interest rate swap agreement for a current notional amount of $ 124.6 million at a fixed rate of 2.998 %.

Under this agreement, the Company pays monthly the fixed rate of 2.95 % and receives the one-month LIBOR plus 1.50 %.

Under this agreement, the Company pays monthly the fixed rate of 2.998 % and receives the one-month SOFR plus 1.60 %.

The interest rate swap effectively hedges floating rate debt in the same amount as the current notional amount of the interest swap.

5 unchanged sentences

For the fiscal year ended September 24, 2022, the Company recorded $ 15.8 million of other comprehensive income, net of income taxes, in its Consolidated Statements of Comprehensive Income.

Unrealized losses of $ 4.5 million are recorded as a liability at fair value in the line “Other Long-Term Liabilities” on the Consolidated Balance Sheet as of September 25, 2021.

Unrealized gains of $ 16.4 million are recorded as an asset at fair value in the line “Other Assets” on the Consolidated Balance Sheet as of September 24, 2022.

Failure of the swap counterparty to make payments would result in the loss of any potential benefit to the Company under the swap agreement.

1 unchanged sentence

Additionally, failure of the swap counterparty would not eliminate the Company’s obligation to continue to make payments under the existing swap agreement if it continues to be in a net pay position.

The Company’s long-term debt agreements generally contain provisions that under certain circumstances would permit lending institutions to terminate or withdraw their respective extensions of credit to the Company.

The Company was in compliance with all financial covenants at September 24, 2022.

At September 30, 2023, property and equipment with an undepreciated cost of approximately $ 257.2 million was pledged as collateral for long-term debt.

1 unchanged sentence

While there are no current restrictions on net income or retained earnings available for the payment of dividends, certain loan agreements contain provisions outlining minimum tangible net worth requirements that restrict the ability of the Company to pay cash dividends in excess of the current annual per share dividends paid on the Company’s Class A and Class B Common Stock.

Components of interest costs are as follows:

Components of interest costs were as follows:

Total interest costs

1 unchanged sentence

( 1,130,933 )

( 1,675,556 )

Interest expense

Maturities of long-term debt at September 24, 2022 are as follows:

Maturities of long-term debt at September 30, 2023 were as follows:

Less unamortized prepaid loan costs

8 unchanged sentences

The holders of the Class A Common Stock and Class B Common Stock are entitled to dividends and other distributions when declared out of assets legally available therefore, subject to the dividend rights of any preferred stock that may be issued in the future.

Each share of Class A Common Stock is entitled to receive a cash dividend and liquidation payment in an amount equal to 110 % of any cash dividend or liquidation payment on Class B Common Stock.

share of Class A Common Stock is entitled to receive a cash dividend and liquidation payment in an amount equal to 110 % of any cash dividend or liquidation payment on Class B Common Stock.

Any stock dividend must be paid in shares of Class A Common Stock with respect to Class A Common Stock and in shares of Class B Common Stock with respect to Class B Common Stock.

38 unchanged sentences

Company contributions to the plan, included in operating and administrative expenses, were approximately $ 509,000 , $ 440,000 and $ 375,000 for fiscal years 2023, 2022 and 2021, respectively.

Cash Bonuses - The Company pays monthly bonuses to various managerial personnel based on performance of the operating units managed by these personnel.

Cash Bonuses – The Company pays monthly bonuses to various managerial personnel based on the performance of the operating units managed by these personnel.

The Company pays discretionary annual bonuses to certain associates who do not receive monthly performance bonuses.

25 unchanged sentences

The “Perishable” category includes meat, produce, deli and bakery.

The fluid dairy operation, included in “Other”, had $ 51.4 million, $ 46.5 million and $ 47.0 million in sales to the grocery sales segment in fiscal 2022, 2021 and 2020, respectively.

These sales were eliminated in consolidation.

Commitments and Contingencies

6 unchanged sentences

The suppliers can modify or terminate the contracts if the Company does not meet certain minimum monthly purchase requirements.

There have been no other material changes in contractual obligations and commercial commitments subsequent to September 24, 2022 other than as described elsewhere in this Form 10-K.

There have been no other material changes in contractual obligations and commercial commitments subsequent to September 30, 2023 other than as described elsewhere in this Annual Report on Form 10-K.

Fair Values of Financial Instruments

17 unchanged sentences

The inputs into the determination of fair value require significant management judgment or estimation.

The carrying amount and fair value of the Company’s debt, interest rate swaps, and non-qualified plan assets at September 24, 2022 is as follows (in thousands):

The carrying amount and fair value of the Company’s debt, interest rate swaps, and non-qualified plan assets at September 30, 2023 is was follows (in thousands):

Fair Value Measurements

11 unchanged sentences

Related Party Transactions

In August 2022, the Company sold a land parcel for $ 725 thousand to a limited liability corporation having Robert P.

Ingle II, the Company’s Chairman of the Board, as one of its principals with a financial interest in the transaction.

In accordance with the Company’s Related Party Transaction policy, independent fair market value appraisals were obtained to determine the selling price, and the Company’s Audit Committee approved the transaction.

The Company will from time to time make short-term non-interest bearing loans to the Company’s Investment/Profit Sharing Plan to allow the plan to meet distribution obligations during a time when the plan was prohibited from selling shares of the Company’s Class A Common Stock.

There were no such loans outstanding at September 24, 2022 or September 25, 2021.

At September 30, 2023 there was an aggregate of $ 330,000 of outstanding loans, and there were no such loans outstanding at September 24, 2022.

During the twelve months ended September 30, 2023, a limited liability company having Robert P.

Ingle II, the Company’s Chairman of the Board, as one of its principals, purchased a shopping center from an unrelated party at which the Company has a long-term lease in place.

The Company’s lease was in place prior to such purchase, and the terms of the lease have not changed since it was originally negotiated.

During the twelve months ended September 30, 2023, the Company purchased two properties, which join property owned by the Company, for a combined $ 5.8 million from a limited liability company having Mr.

Ingle II as one of its principals.

In accordance with the Company’s Related Party Transaction policy, independent fair market value appraisals were obtained to determine the purchase price, and the Company’s Audit Committee reviewed and approved the transaction.

During the twelve months ended September 30, 2023, the Company and a limited liability company having Mr.

Ingle II, as one of its principals swapped adjoining properties in an even exchange.

In accordance with the Company’s Related Party Transaction policy, independent fair market value appraisals were obtained, and the Company’s Audit Committee reviewed and approved the transaction

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INGLES MARKETS, INCORPORATED

Chief Executive Officer, President

President, Chief Executive Officer

and Chief Operating Officer

(principal executive officer)

November 29, 2023

4 unchanged sentences

November 29, 2023

Lanning, CEO, President,

Lanning, President, Chief Executive Officer,

Chief Operating Officer and Director

(principal executive officer)

/s/ Patricia E.

November 29, 2023

Jackson, CPA, Vice

President-Finance, Chief Financial Officer and Director

Jackson, CPA,

Vice President-Finance, Chief Financial Officer, and Director

(principal financial and accounting officer)

/s/ Catherine L.

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures