What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2025-02-06 · 120 added, 43 removed, 342 unchanged (32% of the section changed)

25 unchanged sentences

Noncurrent operating lease liabilities

Noncurrent operating finance liabilities

Noncurrent finance lease liabilities

Other Long-Term Liabilities

4 unchanged sentences

no shares issued

Common stocks:

Common stock:

Class A, $ 0.05 par value;

150,000,000 shares authorized;

‎ 14,545,750 shares issued and outstanding December 28, 2024;

‎ 14,547,055 shares issued and outstanding at March 29, 2025;

‎ 14,544,925 shares issued and outstanding at September 28, 2024

1 unchanged sentence

‎ 100,000,000 shares authorized;

‎ 4,448,626 shares issued and outstanding December 28, 2024;

‎ 4,447,321 shares issued and outstanding at March 29, 2025;

‎ 4,449,451 shares issued and outstanding at September 28, 2024

18 unchanged sentences

1,020,296,521

1,045,594,741

Operating and administrative expenses

(Loss) Gain from sale or disposal of assets

Income from operations

Other income, net

Interest expense

Income before income taxes

Income tax expense

Other comprehensive (loss) income:

Change in fair value of interest rate swap

( 2,423,650 )

Income tax benefit (expense)

Other comprehensive (loss) income, net of tax

( 1,833,650 )

Comprehensive income

Per share amounts:

Class A Common Stock

Basic earnings per common share

Diluted earnings per common share

Class B Common Stock

Basic earnings per common share

Diluted earnings per common share

Cash dividends per common share

Class A Common Stock

Class B Common Stock

See notes to unaudited condensed consolidated financial statements.

INGLES MARKETS, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

Six Months Ended

2,619,387,821

2,848,541,531

Cost of goods sold

2,007,276,472

2,177,855,492

Operating and administrative expenses

Gain from sale or disposal of assets

24 unchanged sentences

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

THREE MONTHS ENDED DECEMBER 28, 2024 AND DECEMBER 30, 2023

THREE AND SIX MONTHS ENDED MARCH 29, 2025 AND MARCH 30, 2024

Comprehensive

13 unchanged sentences

1,495,469,572

Other comprehensive income, net of income tax

Cash dividends

( 3,067,200 )

Common stock conversions

Balance, March 30, 2024

1,513,947,204

1,525,442,469

Balance, September 28, 2024

9 unchanged sentences

1,561,607,836

Other comprehensive loss, net of income tax

( 1,833,650 )

Cash dividends

( 3,067,343 )

Common stock conversions

Balance, March 29, 2025

1,563,621,421

1,571,812,858

See notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

Cash Flows from Operating Activities:

4 unchanged sentences

( 2,953,915 )

( 8,339,044 )

Receipt of advance payments on purchase contracts

Recognition of advance payments on purchase contracts

( 1,185,721 )

( 1,529,141 )

Deferred income taxes

( 1,756,000 )

( 2,757,000 )

Changes in operating assets and liabilities:

9 unchanged sentences

( 39,646,215 )

Net Cash (Used) Provided by Operating Activities

( 43,647,293 )

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities:

Purchase of short term investments

Proceeds from sales of property and equipment

23 unchanged sentences

INGLES MARKETS, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

Three Months Ended December 28, 2024 and December 30, 2023

NOTES TO CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

Three Months and Six Months Ended March 29, 2025 and March 30, 2024

BASIS OF PREPARATION

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position as of December 28, 2024, and the results of operations, changes in stockholders’ equity and cash flows of Ingles Markets, Incorporated, a North Carolina corporation (“Ingles”, the “Company”, “we”, “us”, or “our”), for the three months ended December 28, 2024 and December 30, 2023.

In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements contain all adjustments necessary to present fairly the financial position as of March 29, 2025 and the results of operations and changes in stockholders’ equity for the three-month and six-month periods ended March 29, 2025 and March 30, 2024, and cash flows of Ingles Markets, Incorporated, a North Carolina corporation (“Ingles”, the “Company”, “we”, “us”, or “our”), for the six months ended March 29, 2025 and March 30, 2024.

The adjustments made are of a normal recurring nature.

Certain information and footnote disclosures included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q.

It is suggested that these unaudited interim financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended September 28, 2024, filed by the Company under the Securities Exchange Act of 1934, on December 27, 2024.

The results of operations for the three months ended December 28, 2024 are not necessarily indicative of the results to be expected for the full fiscal year.

It is suggested that these condensed consolidated unaudited interim financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended September 28, 2024, filed by the Company under the Securities Exchange Act of 1934, on December 27, 2024.

The results of operations for the three-month and six-month periods ended March 29, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

NEW ACCOUNTING PRONOUNCEMENTS

25 unchanged sentences

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Receivables are presented net of an allowance for doubtful accounts of $ 483,853 at December 28, 2024 and $ 474,684 at September 28, 2024.

Receivables are presented net of an allowance for doubtful accounts of $ 483,827 at March 29, 2025 and $ 474,684 at September 28, 2024.

The Company’s effective tax rate differs from the federal statutory rate primarily as a result of state income taxes and tax credits.

10 unchanged sentences

The Company is currently insured for covered costs in excess of $ 1.0 million per occurrence for workers’ compensation and for general liability and $ 500,000 per covered person for medical care benefits for a policy year.

The Company’s self-insurance reserves totaled $ 36.7 million at December 28, 2024.

The Company’s self-insurance reserves totaled $ 37.3 million at March 29, 2025.

Of this amount, $ 16.9 million was accounted for as a current liability and $ 20.4 million as a long-term liability, which included $ 3.7 million of expected self-insurance recoveries from excess cost insurance or other sources that was recorded as a receivable.

At September 28, 2024, the Company’s self-insurance reserves totaled $ 35.9 million of which $ 16.5 million was accounted for as a current liability and $ 19.4 million as a long-term liability, which included $ 4.1 million of expected self-insurance recoveries from excess cost insurance or other sources that was recorded as a receivable.

Employee insurance expense, including workers’ compensation and medical care benefits, net of employee contributions, totaled $ 11.2 million and $ 13.1 million for the three months ended December 28, 2024 and December 30, 2023, respectively.

Employee insurance expense, including workers’ compensation and medical care benefits, net of employee contributions, totaled $ 12.0 million and $ 9.4 million for the three-month periods ended March 29, 2025 and March 30, 2024, respectively.

For the six-month periods ended March 29, 2025 and March 30, 2024, employee insurance expense, net of employee contributions totaled $ 23.2 million and $ 22.4 million, respectively.

The Company’s fuel operations use underground tanks for the storage of gasoline and diesel fuel.

1 unchanged sentence

The Company followed the FASB ASC 410 model for determining the asset retirement cost and asset retirement obligation.

The amounts recorded were immaterial for each fuel center as well as in the aggregate, at December 28, 2024 and September 28, 2024.

The amounts recorded were immaterial for each fuel center as well as in the aggregate, at March 29, 2025 and September 28, 2024.

LONG-TERM DEBT

4 unchanged sentences

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 of letters of credit, of which none were issued at December 28, 2024.

The Line allows the Company to issue up to $ 10.0 million of letters of credit, of which $ 500,000 was issued at March 29, 2025.

The Company is not required to maintain compensating balances in connection with the Line.

At December 28, 2024, the Company had no borrowings outstanding under the Line.

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

2 unchanged sentences

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

The outstanding balance of the Bonds was $ 49.9 million as of December 28, 2024.

The outstanding balance of the Bonds was $ 45.4 million as of March 29, 2025.

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

15 unchanged sentences

The Company has designated the swaps as cash flow hedges and records the changes in the estimated fair value of the swaps to other comprehensive income each period.

For the three months ended December 28, 2024, the Company recorded $ 2.3 million of other comprehensive income, net of income taxes, in its Condensed Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 12.0 million were included as an asset at fair value in the line “Other Assets” on the Condensed Consolidated Balance Sheet as of December 28, 2024.

For the three months ended March 29, 2025, the Company recorded $ 1.8 million of other comprehensive loss, and for the six months ended March 29, 2025, the Company recorded $ 0.5 million of other comprehensive income, net of income taxes, in its Condensed Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 9.6 million were included as an asset at fair value in the line “Other Assets” on the Condensed Consolidated Balance Sheet as of March 29, 2025.

For the three months ended March 30, 2024, the Company recorded $ 1.1 million of other comprehensive income, and for the six months ended March 30, 2024, the Company recorded $ 2.7 million of other comprehensive loss, net of income taxes, in its Condensed Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 14.0 million were included as an asset at fair value in the line “Other Assets” on the Condensed Consolidated Balance Sheet as of March 30, 2024.

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.

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 Company was in compliance with all financial covenants at December 28, 2024.

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 respective loan documents.

The Company was in compliance with all financial covenants at March 29, 2025.

The Company’s long-term debt agreements generally have cross-default provisions which could result in the acceleration of payments due under all long-term debt agreements in the event of default under any one instrument.

At December 28, 2024, property and equipment with an undepreciated cost of approximately $ 248.8 million were pledged as collateral for long-term debt.

At March 29, 2025, property and equipment with an undepreciated cost of approximately $ 247.7 million were pledged as collateral for long-term debt.

Long-term debt and Line agreements contain various restrictive covenants requiring, among other things, minimum levels of net worth and maintenance of certain financial ratios.

At December 28, 2024, the Company had excess net worth totaling $ 511.2 million calculated under covenants in the Bonds, various floating rate loans (the “Loans”), and the Line.

At March 29, 2025, the Company had excess net worth totaling $ 513.9 million calculated under covenants in the Bonds, various floating rate loans, and the Line.

This amount is available to pay dividends;

however, certain loan agreements containing provisions outlining minimum tangible net worth requirements 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 Common Stock and Class B Common Stock.

however, certain loan agreements containing provisions outlining minimum tangible net worth requirements restrict the ability of the Company to pay cash dividends in excess of two times the current annual per share dividends paid on the Company’s Class A Common Stock and Class B Common Stock.

Further, the Company is prevented from paying cash dividends at any time that it is in default under the indenture governing the Notes.

2 unchanged sentences

The Company paid cash dividends of $ 0.165 for each share of Class A Common Stock and $ 0.15 for each share of Class B Common Stock on January 16, 2025 to stockholders of record on January 9, 2025 .

The Company paid cash dividends of $ 0.165 for each share of Class A Common Stock and $ 0.15 for each share of Class B Common Stock on April 17, 2025 to stockholders of record on April 10, 2025 .

For additional information regarding the dividend rights of the Class A Common Stock and Class B Common Stock, please see Note 8, “Stockholders’ Equity” to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K filed by the Company under the Securities Exchange Act of 1934, on December 27, 2024.

11 unchanged sentences

Three Months Ended

Six Months Ended

March 29, 2025

Allocated net income

Net income allocated, basic

Conversion of Class B to Class A shares

Net income allocated, diluted

Weighted average shares outstanding

Weighted average shares outstanding, basic

Conversion of Class B to Class A shares

Weighted average shares outstanding, diluted

Earnings per share

Three Months Ended

December 28, 2024

December 30, 2023

Six Months Ended

March 30, 2024

Allocated net income

13 unchanged sentences

Step rent provisions, escalation clauses and lease incentives are considered in computing minimum lease payments.

Operating Leases – Rent expense for all operating leases totaled $ 1.7 million for the three months ended December 28, 2024.

Operating Leases – Rent expense for all operating leases totaled $ 2.0 million and $ 3.7 million for the three and six months ended March 29, 2025, respectively.

This amount included short-term (less than one year) leases, common area expenses, and variable lease costs, all of which were insignificant.

Cash paid for lease liabilities in operating activities approximates operating lease cost.

Finance Leases – Finance lease cost of $ 210.0 thousand included amortization expense of $ 178.5 thousand, which was included in operating and administrative expense, and $ 45.1 thousand of interest expense for the three months ended December 28, 2024.

Future maturities of lease liabilities as of December 28, 2024 were as follows:

Finance Leases – Finance lease cost of $ 420.0 thousand included amortization expense of $ 357.0 thousand, which was included in operating and administrative expense, and $ 87.7 thousand of interest expense for the six months ended March 29, 2025.

Future maturities of lease liabilities as of March 29, 2025 were as follows:

Operating Leases

4 unchanged sentences

Present value of lease liabilities

There were no lease extensions exercised to increase the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” on the Condensed Consolidated Balance Sheets during the three months ended December 28, 2024.

At December 28, 2024, the weighted average remaining lease term for the Company’s operating leases was 15.0 years.

The weighted average discount rate used to determine the operating lease liability balances as of December 28, 2024 was 4.0 %, and was 6.0 % for finance lease liability balances.

Lease extensions exercised during the six months ended March 29, 2025 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $ 4.1 million on the Condensed Consolidated Balance Sheets as of March 29, 2025.

At March 29, 2025, the weighted average remaining lease term for the Company’s operating leases was 14.1 years.

The weighted average discount rates used to determine operating lease liability balances and finance lease liability balances were 4.3 % and 6.0 %, respectively.

Leases as Lessor

At December 28, 2024, the Company owned and operated 100 shopping centers in conjunction with its supermarket operations.

At March 29, 2025, the Company owned and operated 101 shopping centers in conjunction with its supermarket operations.

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

3 unchanged sentences

Three Months Ended

December 28, 2024

Six Months Ended

March 29, 2025

Rents earned on owned and subleased properties:

2 unchanged sentences

( 2,155,209 )

( 4,310,418 )

Other shopping center expenses

( 1,129,957 )

Future minimum operating lease receipts at December 28, 2024 were as follows:

( 2,239,023 )

Future minimum operating lease receipts at March 29, 2025 were as follows:

Remainder of 2025

5 unchanged sentences

Three Months Ended

Six Months Ended

Revenues from unaffiliated customers:

22 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 retirement plan assets at December 28, 2024 were as follows (in thousands):

The carrying amount and fair value of the Company’s debt, interest rate swaps, and non-qualified retirement plan assets at March 29, 2025 were as follows (in thousands):

Senior Notes due 2031

1 unchanged sentence

Secured notes payable and other

Interest rate swaps derivative contract assets

Interest rate swap derivative contracts asset

Non-qualified retirement plan assets

11 unchanged sentences

The final amount of the claim is currently being assessed and the timing and exact amount of insurance proceeds remain uncertain.

The Company did not recognize an asset for the insurance recovery receivable in the Consolidated Balance Sheet as of December 28, 2024, because recovery was not yet deemed probable.

The Company did no t recognize an asset for the insurance recovery receivable in the Consolidated Balance Sheet as of March 29, 2025, because recovery was not yet deemed probable.

The Company will continue to monitor the claims process and will adjust its impact on financials statements accordingly in future periods.

Subsequent to March 29, 2025, the Company entered into an agreement to receive a partial payment of $ 4.2 million towards the ultimate settlement of the inventory loss claims.

We will continue to work with the insurance carriers to reach final determination with respect to the total recovery of the inventory loss claims.

RELATED PARTY TRANSACTIONS

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 is prohibited from selling shares of the Company’s Class A Common Stock.

During the three months ended December 28, 2024, no such loans were made, repaid or outstanding.

During the six months ended March 29, 2025, no such loans were made, repaid, or outstanding.

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-Q

Item 1. Financial Statements