ASHEVILLE, N.C. – (February 7, 2019) – Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported higher sales and pretax income for the three months ended December 29, 2018, compared with the three months ended December 30, 2017. Total sales rose 4.7% over the comparative quarters. Pretax income totaled $28.1 million for the quarter ended December 29, 2018, 10.9% higher than pretax income of $25.4 million for the quarter ended December 30, 2017. The December 2017 quarter included a reduction in non-cash deferred tax expense from changes to federal income tax law, resulting in higher net income for the December 2017 quarter compared with the current quarter.

Robert P. Ingle II, Chairman of the Board, stated, "We had a successful first quarter and holiday season due to the dedication and hard work from all our associates. We also made significant investments in our Company that will benefit many future periods."

First Quarter Results
Net sales totaled $1.06 billion for the quarter ended December 29, 2018, compared with $1.01 billion for the quarter ended December 30, 2017, an increase of $48.1 million. Comparable store sales, excluding gasoline, increased 3.9%. Gasoline gallons sold and the price per gallon increased comparing the December 2018 quarter with the December 2017 quarter. The number of customer transactions (excluding gasoline) and the comparable average transaction size (excluding gasoline) increased compared with the same quarter last year.

Gross profit for the December 2018 quarter rose to $258.4 million, or 24.3% of sales. Gross profit for the December 2017 quarter was $244.7 million, also 24.1% of sales. Operating and administrative expenses for the December 2018 quarter totaled $218.7 million, compared with $208.8 million for the December 2017 quarter. Increased personnel costs accounted for much of the increase, influenced by increased sales and by continued high demand for labor.

Interest expense totaled $12.2 million for the three-month period ended December 29, 2018, compared with $11.5 million for the three-month period ended December 30, 2017. Total debt at the end of December 2018 was $880.0 million, compared with $890.5 million at the end of December 2017. Market interest rates have been rising steadily over the past twelve months.

Net income totaled $22.2 million for the quarter ended December 29, 2018, compared with $45.1 million for the quarter ended December 30, 2017. During last year’s first quarter, the Company recognized a $26.7 million deferred tax benefit from the December 2017 reduction in the federal income tax rate. This year’s quarter contains no such benefit.

Basic and diluted earnings per share for Class A Common Stock were $1.12 and $1.09, respectively, for the quarter ended December 29, 2018, compared with $2.29 and $2.23 per share, respectively, for the quarter ended December 30, 2017. Basic and diluted earnings per share for Class B Common Stock were each $1.02 for the quarter ended December 29, 2018, compared with $2.08 per basic and diluted Class B share for the quarter ended December 30, 2017.

Capital expenditures totaled $71.0 million for the December 2018 quarter, compared with $56.8 million for the December 2017 quarter. The increase is primarily attributable to the purchase of a shopping center where the Company had been leasing a store. Total fiscal 2019 capital expenditures are expected to be between $140 million and $180 million.

The Company currently has a line of credit totaling $175.0 million, of which $149.4 million is currently available. The Company believes its financial resources, including this line of credit and other internal and anticipated external sources of funds, will be sufficient to meet planned capital expenditures, debt service and working capital requirements for the foreseeable future.

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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 2018 Form 10-K.

Ingles Markets, Incorporated is a leading supermarket chain with operations in six southeastern states. Headquartered in Asheville, North Carolina, the Company operates 200 supermarkets. In conjunction with its supermarket operations, the Company operates neighborhood shopping centers, most of which contain an Ingles supermarket. The Company also owns a fluid dairy facility that supplies Company supermarkets and unaffiliated customers. The Company's Class A Common Stock is traded on The NASDAQ Stock Market's Global Select Market under the symbol IMKTA. For more information, visit Ingles' website at www.ingles-markets.com.


Ingles Markets, Incorporated - Post Office Box 6676, Asheville, NC 28816