UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 26, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 0-14706.
INGLES MARKETS, INCORPORATED
(Exact name of registrant as specified in its charter)
| North Carolina | 56-0846267 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
|
P.O. Box 6676, Asheville NC |
28816 | |
| (Address of principal executive offices) | (Zip Code) |
(828) 669-2941
Registrant’s telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨.
As of July 27, 2004, the Registrant had 11,604,095 shares of Class A Common Stock, $0.05 par value per share, outstanding and 12,369,166 shares of Class B Common Stock, $0.05 par value per share, outstanding.
INDEX
2
INGLES MARKETS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| JUNE 26, 2004 (UNAUDITED) |
SEPTEMBER 27, 2003 (NOTE) | |||||
| ASSETS |
||||||
| Current Assets: |
||||||
| Cash |
$ | 51,440,581 | $ | 80,865,318 | ||
| Receivables |
33,848,621 | 31,014,026 | ||||
| Inventories |
192,543,551 | 194,834,781 | ||||
| Other |
6,668,426 | 8,351,169 | ||||
| Total Current Assets |
284,501,179 | 315,065,294 | ||||
| Property and Equipment – Net |
752,675,525 | 740,834,467 | ||||
| Other Assets |
14,239,825 | 15,759,680 | ||||
| Total Assets |
$ | 1,051,416,529 | $ | 1,071,659,441 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||
| Current Liabilities: |
||||||
| Short-term loans and current portion of long-term debt |
$ | 28,557,374 | $ | 38,032,125 | ||
| Accounts payable, accrued expenses and current portion of other long-term liabilities |
140,802,150 | 144,587,717 | ||||
| Total Current Liabilities |
169,359,524 | 182,619,842 | ||||
| Deferred Income Taxes |
39,204,578 | 40,614,578 | ||||
| Long-Term Debt |
582,187,075 | 602,932,198 | ||||
| Other Long-Term Liabilities |
1,257,344 | 1,929,709 | ||||
| Total Liabilities |
792,008,521 | 828,096,327 | ||||
| Stockholders’ Equity |
||||||
| Preferred stock, $.05 par value; 10,000,000 shares authorized; no shares issued |
— | — | ||||
| Common stocks: |
||||||
| Class A, $.05 par value; 150,000,000 shares authorized; 11,602,818 shares issued and outstanding June 26, 2004; 10,635,419 shares issued and outstanding September 27, 2003 |
580,140 | 531,770 | ||||
| Class B, $.05 par value; 100,000,000 shares authorized; 12,369,391 shares issued and outstanding June 26, 2004; 12,391,216 shares issued and outstanding September 27, 2003 |
618,470 | 619,561 | ||||
| Paid-in capital in excess of par value |
112,001,668 | 102,465,443 | ||||
| Retained earnings |
146,207,730 | 139,946,340 | ||||
| Total Stockholders’ Equity |
259,408,008 | 243,563,114 | ||||
| Total Liabilities and Stockholders’ Equity |
$ | 1,051,416,529 | $ | 1,071,659,441 | ||
NOTE: The condensed consolidated balance sheet at September 27, 2003 has been derived from the audited financial statements at that date.
See notes to unaudited interim financial statements.
3
INGLES MARKETS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| THREE MONTHS ENDED | |||||||
| JUNE 26, 2004 |
JUNE 28, 2003 | ||||||
| Net sales |
$ | 537,908,444 | $ | 503,630,936 | |||
| Cost of goods sold |
396,987,337 | 372,227,283 | |||||
| Gross profit |
140,921,107 | 131,403,653 | |||||
| Operating and administrative expenses |
117,705,575 | 116,553,085 | |||||
| Rental income, net |
2,204,604 | 2,029,832 | |||||
| Income from operations |
25,420,136 | 16,880,400 | |||||
| Other income, net |
1,004,266 | 1,528,007 | |||||
| Interest expense |
13,037,225 | 12,838,129 | |||||
| Income before income taxes |
13,387,177 | 5,570,278 | |||||
| Income taxes: |
|||||||
| Current |
8,604,000 | 1,500,000 | |||||
| Deferred |
(3,420,000 | ) | 500,000 | ||||
| 5,184,000 | 2,000,000 | ||||||
| Net income |
$ | 8,203,177 | $ | 3,570,278 | |||
| Per share amounts: |
|||||||
| Basic earnings per common share |
$ | 0.35 | $ | 0.16 | |||
| Diluted earnings per common share |
$ | 0.35 | $ | 0.16 | |||
| Cash dividends per common share: |
|||||||
| Class A Common Stock |
$ | 0.165 | $ | 0.165 | |||
| Class B Common Stock |
$ | 0.150 | $ | 0.150 | |||
See notes to unaudited interim financial statements.
4
INGLES MARKETS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| NINE MONTHS ENDED |
||||||||
| JUNE 26, 2004 |
JUNE 28, 2003 |
|||||||
| Net sales |
$ | 1,593,302,027 | $ | 1,488,130,084 | ||||
| Cost of goods sold |
1,182,978,051 | 1,098,805,951 | ||||||
| Gross profit |
410,323,976 | 389,324,133 | ||||||
| Operating and administrative expenses |
354,258,269 | 347,712,933 | ||||||
| Rental income, net |
5,488,195 | 6,530,093 | ||||||
| Income from operations |
61,553,902 | 48,141,293 | ||||||
| Other income, net |
6,525,132 | 3,343,692 | ||||||
| Interest expense |
40,607,183 | 38,081,394 | ||||||
| Income before income taxes |
27,471,851 | 13,403,591 | ||||||
| Income taxes: |
||||||||
| Current |
11,560,000 | 6,800,000 | ||||||
| Deferred |
(1,300,000 | ) | (1,962,000 | ) | ||||
| 10,260,000 | 4,838,000 | |||||||
| Net income |
$ | 17,211,851 | $ | 8,565,591 | ||||
| Per share amounts |
||||||||
| Basic earnings per common share |
$ | 0.74 | $ | 0.37 | ||||
| Diluted earnings per common share |
$ | 0.74 | $ | 0.37 | ||||
| Cash dividends per common share: |
||||||||
| Class A Common Stock |
$ | 0.495 | $ | 0.495 | ||||
| Class B Common Stock |
$ | 0.450 | $ | 0.450 | ||||
See notes to unaudited interim financial statements.
5
INGLES MARKETS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
NINE MONTHS ENDED JUNE 26, 2004 AND JUNE 28, 2003
| CLASS A COMMON STOCK |
CLASS B COMMON STOCK |
PAID-IN CAPITAL IN EXCESS OF PAR VALUE |
RETAINED EARNINGS |
TOTAL | |||||||||||||||||||
| SHARES | AMOUNT | SHARES | AMOUNT | ||||||||||||||||||||
| Balance, September 28, 2002 |
10,189,807 | $ | 509,490 | 12,597,932 | $ | 629,897 | $ | 100,148,857 | $ | 137,270,604 | $ | 238,558,848 | |||||||||||
| Net income |
— | — | — | — | — | 8,565,591 | 8,565,591 | ||||||||||||||||
| Cash dividends |
— | — | — | — | — | (10,726,938 | ) | (10,726,938 | ) | ||||||||||||||
| Exercise of stock options |
104,225 | 5,211 | — | — | 1,015,679 | — | 1,020,890 | ||||||||||||||||
| Common stock conversions |
206,716 | 10,336 | (206,716 | ) | (10,336 | ) | — | — | — | ||||||||||||||
| Balance, June 28, 2003 |
10,500,748 | $ | 525,037 | 12,391,216 | $ | 619,561 | $ | 101,164,536 | $ | 135,109,257 | $ | 237,418,391 | |||||||||||
| Balance, September 27, 2003 |
10,635,419 | $ | 531,770 | 12,391,216 | $ | 619,561 | $ | 102,465,443 | $ | 139,946,340 | $ | 243,563,114 | |||||||||||
| Net income |
— | — | — | — | — | 17,211,851 | 17,211,851 | ||||||||||||||||
| Cash dividends |
— | — | — | — | — | (10,950,461 | ) | (10,950,461 | ) | ||||||||||||||
| Exercise of stock options |
945,574 | 47,279 | — | — | 9,536,225 | — | 9,583,504 | ||||||||||||||||
| Common stock conversions |
21,825 | 1,091 | (21,825 | ) | (1,091 | ) | — | — | — | ||||||||||||||
| Balance, June 26, 2004 |
11,602,818 | $ | 580,140 | 12,369,391 | $ | 618,470 | $ | 112,001,668 | $ | 146,207,730 | $ | 259,408,008 | |||||||||||
See notes to unaudited interim financial statements.
6
INGLES MARKETS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| NINE MONTHS ENDED |
||||||||
| JUNE 26, 2004 |
JUNE 28, 2003 |
|||||||
| Cash Flows from Operating Activities: |
||||||||
| Net income |
$ | 17,211,851 | $ | 8,565,591 | ||||