What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 93 added, 76 removed, 386 unchanged (30% of the section changed)

29 unchanged sentences

Stockholders’ Equity

Preferred stock, $ 0.05 par value;

Preferred stock, $ 0.05 par value per share;

10,000,000 shares authorized;

no shares issued

Common stock:

Class A, $ 0.05 par value;

Common stocks:

Class A, $ 0.05 par value per share;

150,000,000 shares authorized;

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

‎ 14,547,280 shares issued and outstanding at June 28, 2025;

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

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

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

‎ 100,000,000 shares authorized;

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

‎ 4,447,096 shares issued and outstanding at June 28, 2025;

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

20 unchanged sentences

Operating and administrative expenses

(Loss) Gain from sale or disposal of assets

Gain from sale or disposal of assets

Income from operations

3 unchanged sentences

Income tax expense

Other comprehensive (loss) income:

Other comprehensive loss:

Change in fair value of interest rate swap

( 1,445,649 )

Income tax benefit (expense)

Other comprehensive (loss) income, net of tax

Income tax benefit

Other comprehensive loss, net of tax

( 1,087,649 )

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

Six Months Ended

Nine Months Ended

3,965,609,341

3 unchanged sentences

3,241,636,263

1,000,444,341

Operating and administrative expenses

5 unchanged sentences

Income tax expense

Other comprehensive income (loss):

Other comprehensive loss:

Change in fair value of interest rate swap

( 3,898,695 )

Income tax (expense) benefit

Other comprehensive income (loss), net of tax

Income tax benefit

Other comprehensive loss, net of tax

( 2,950,695 )

13 unchanged sentences

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

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

THREE AND NINE MONTHS ENDED JUNE 28, 2025 AND JUNE 29, 2024

Comprehensive

(Loss) Income

Income (Loss)

Balance, September 30, 2023

19 unchanged sentences

1,525,442,469

Other comprehensive loss, net of income tax

Cash dividends

( 3,067,208 )

Common stock conversions

Balance, June 29, 2024

1,542,601,595

1,553,834,250

Balance, September 28, 2024

19 unchanged sentences

1,571,812,858

Other comprehensive loss, net of income tax

( 1,087,649 )

Cash dividends

( 3,067,366 )

Common stock conversions

Balance, June 28, 2025

1,586,753,010

1,593,856,798

See notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

Nine Months Ended

Cash Flows from Operating Activities:

5 unchanged sentences

( 8,982,047 )

Receipt of advance payments on purchase contracts

Recognition of advance payments on purchase contracts

Receipt of advance payments

Recognition of advance payments

( 1,613,580 )

2 unchanged sentences

( 1,052,000 )

( 2,757,000 )

Changes in operating assets and liabilities:

2 unchanged sentences

( 7,620,010 )

( 9,112,237 )

Operating lease liabilities

17 unchanged sentences

( 14,842,548 )

Debt issuance costs

Repayment of finance lease

5 unchanged sentences

( 24,516,654 )

Net Decrease in Cash and Cash Equivalents

( 56,358,444 )

Net (Decrease) Increase in Cash and Cash Equivalents

( 17,600,493 )

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

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

Three Months and Nine Months Ended June 28, 2025 and June 29, 2024

BASIS OF PREPARATION

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.

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 June 28, 2025 and the results of operations and changes in stockholders’ equity for the three-month and nine-month periods ended June 28, 2025 and June 29, 2024, and cash flows of Ingles Markets, Incorporated, a North Carolina corporation (“Ingles”, the “Company”, “we”, “us”, or “our”), for the nine months ended June 28, 2025 and June 29, 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 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.

Certain information and footnote disclosures included in our audited 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.

The results of operations for the three-month and nine-month periods ended June 28, 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 $ 483,827 at March 29, 2025 and $ 474,684 at September 28, 2024.

Receivables are presented net of an allowance for doubtful accounts of $ 404,304 at June 28, 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.

2 unchanged sentences

ACCRUED EXPENSES AND CURRENT PORTION OF OTHER LONG-TERM LIABILITIES

Accrued expenses and current portion of other long-term liabilities consist of the following:

Accrued expenses and current portion of other long-term liabilities consisted of the following:

September 28,

5 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 $ 37.3 million at March 29, 2025.

The Company’s self-insurance reserves totaled $ 36.8 million at June 28, 2025.

Of this amount, $ 16.6 million was accounted for as a current liability and $ 20.2 million as a long-term liability, which included $ 3.9 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 $ 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.

Employee insurance expense, including workers’ compensation and medical care benefits, net of employee contributions, totaled $ 12.8 million and $ 9.4 million for the three-month periods ended June 28, 2025 and June 29, 2024, respectively.

For the nine-month periods ended June 28, 2025 and June 29, 2024, employee insurance expense, net of employee contributions totaled $ 36.0 million and $ 31.9 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 March 29, 2025 and September 28, 2024.

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

LONG-TERM DEBT

2 unchanged sentences

2029 and thereafter

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

The Company has a $ 150.0 million line of credit (the “Line”) that, as amended in June 2025, matures in June 2030 .

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 $ 500,000 was issued at March 29, 2025.

The Line allows the Company to issue up to $ 10.0 million of letters of credit, of which a single letter of credit in the amount of $ 500,000 was outstanding at June 28, 2025.

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

1 unchanged sentence

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, the financial institutions would hold the Bonds until December 2029, subject to certain events.

The Project was completed in 2012.

Under a Continuing Covenant and Collateral Agency Agreement (the “Covenant Agreement”) between certain financial institutions and the Company, the financial institutions agreed to hold the Bonds until December 17, 2029, 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 outstanding balance of the Bonds was $ 45.4 million as of March 29, 2025.

The outstanding balance of the Bonds was $ 45.4 million as of June 28, 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 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.

For the three and nine months ended June 28, 2025, the Company recorded $ 1.1 million and $ 0.6 million of other comprehensive loss, respectively, net of income taxes, in its Condensed Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 8.2 million were included as an asset at fair value in the line “Other Assets” on the Condensed Consolidated Balance Sheet as of June 28, 2025.

For the three and nine months ended June 29, 2024, the Company recorded $ 0.3 million and $ 3.0 million of other comprehensive loss, respectively, net of income taxes, in its Condensed Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 13.6 million were included as an asset at fair value in the line “Other Assets” on the Condensed Consolidated Balance Sheet as of June 29, 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 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 was in compliance with all financial covenants at June 28, 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 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 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 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.

At June 28, 2025, property and equipment with an undepreciated cost of approximately $ 245.9 million were pledged as collateral for long-term debt.

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

The Line permits the Company to pay dividends on its common stock, as long as the Company is in compliance with certain financial covenants.

In addition, the terms of the indenture may restrict the ability of the Company to pay additional cash dividends based on certain financial parameters.

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 April 17, 2025 to stockholders of record on April 10, 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 July 17, 2025 to stockholders of record on July 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

Nine Months Ended

June 28, 2025

Allocated net income

8 unchanged sentences

Three Months Ended

Six Months Ended

March 30, 2024

Nine Months Ended

June 29, 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 $ 2.0 million and $ 3.7 million for the three and six months ended March 29, 2025, respectively.

Operating Leases – Rent expense for all operating leases totaled $ 1.8 million for the three months ended June 28, 2025 and $ 5.5 million for the nine months ended June 28, 2025.

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 $ 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:

Finance Leases – Finance lease cost of $ 630.0 thousand included amortization expense of $ 535.5 thousand, which was included in operating and administrative expense, and $ 127.7 thousand of interest expense for the nine months ended June 28, 2025.

Future maturities of lease liabilities as of June 28, 2025 were as follows:

Operating Leases

4 unchanged sentences

Present value of lease liabilities

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.

Lease extensions exercised during the nine months ended June 28, 2025 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $ 3.9 million on the Condensed Consolidated Balance Sheet for the nine months ended June 28, 2025.

At June 28, 2025, the weighted average remaining lease term for the Company’s operating leases was 14.2 years.

As of June 28, 2025, the weighted average discount rates used to determine operating lease and finance lease liability balances were 4.3 % and 6.0 %, respectively.

Leases as Lessor

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

At June 28, 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

Six Months Ended

March 29, 2025

Nine Months Ended

June 28, 2025

Rents earned on owned and subleased properties:

6 unchanged sentences

( 3,328,663 )

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

Future minimum operating lease receipts at June 28, 2025 were as follows:

Remainder of 2025

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine 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 March 29, 2025 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 June 28, 2025 were as follows (in thousands):

Senior Notes due 2031

12 unchanged sentences

Various legal proceedings and claims arising in the ordinary course of business are pending against the Company.

In the opinion of management, the ultimate liability, if any, from all pending legal proceedings and claims is not expected to materially affect the Company’s financial position, the results of its operations, or its cash flows.

The Company is currently working with its insurance carriers to reach final determinations with respect to inventory loss claims related to the impact of Hurricane Helene.

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

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.

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

The Company did no t recognize an asset for the insurance recovery receivable in the Consolidated Balance Sheet as of June 28, 2025 because recovery was not yet deemed probable.

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

On May 1, 2025 the Company entered into an agreement and received a partial payment of $ 4.2 million towards the ultimate settlement of the inventory loss claims.

The proceeds were recorded as a reduction of cost of goods sold.

We will continue to work with the insurance carriers to reach final determinations 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 six months ended March 29, 2025, no such loans were made, repaid, or outstanding.

During the nine months ended June 28, 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