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<SEC-DOCUMENT>0001157523-06-007603.txt : 20060731
<SEC-HEADER>0001157523-06-007603.hdr.sgml : 20060731
<ACCEPTANCE-DATETIME>20060731080020
ACCESSION NUMBER:		0001157523-06-007603
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060731
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060731
DATE AS OF CHANGE:		20060731

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INGLES MARKETS INC
		CENTRAL INDEX KEY:			0000050493
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-GROCERY STORES [5411]
		IRS NUMBER:				560846267
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14706
		FILM NUMBER:		06989520

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
		BUSINESS PHONE:		7046692941

	MAIL ADDRESS:	
		STREET 1:		P O BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a5198486.txt
<DESCRIPTION>INGLES MARKETS, INCORPORATED 8-K
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)   July 31, 2006
                                               ---------------------------------

                          INGLES MARKETS, INCORPORATED
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


    North Carolina                   0-14706                     56-0846267
- --------------------------------------------------------------------------------
 (State or other jurisdiction       (Commission                (IRS Employer
      of incorporation)              File Number)            Identification No.)


P.O. Box 6676, Asheville, NC                                             28816
- --------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code (828) 669-2941
                                                   -----------------------------

                                      N/A
- --------------------------------------------------------------------------------
         (Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))




<PAGE>



Item 2.02  Results of Operations and Financial Condition.

On July 31, 2006, Ingles Markets, Incorporated ("IMKTA") issued a press release
announcing financial information for its third fiscal quarter ended June 24,
2006. The press release is attached as Exhibit 99.1 to this Form 8-K.


Item 9.01  Financial Statements and Exhibits.

(d)     Exhibits.

        Exhibit Number             Description of Exhibit
        --------------             ----------------------
        99.1                       Press release issued July 31, 2006


<PAGE>




                                   SIGNATURES
                                   ----------

Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                                INGLES MARKETS, INCORPORATED
                                           -------------------------------------
                                                         (Registrant)

Date:  July 31, 2006
                                      By:  /s/ Ronald B. Freeman
                                           -------------------------------------
                                           Ronald B. Freeman
                                           Chief Financial Officer


<PAGE>



                                  EXHIBIT INDEX
                                  -------------

Exhibit                    Description
- -------                    -----------
99.1                       Press Release dated July 31, 2006


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a5198486ex99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
                                                                    Exhibit 99.1

           Ingles Markets, Incorporated Announces Third Quarter Sales
                             and Earnings Increases


    ASHEVILLE, N.C.--(BUSINESS WIRE)--July 31, 2006--Ingles Markets,
Incorporated (NASDAQ: IMKTA) today reported that net income increased
108.9% (from $6.6 million to $13.8 million) for the three months and
80.9% (from $17.2 million to $31.1 million) for the nine months ended
June 24, 2006, compared to the previous year. The earnings increases
were largely driven by broad-based sales increases and cost
efficiencies.
    Net sales for the June 2006 quarter increased 16.3% over the June
2005 quarter to $659.2 million, while comparable grocery store sales
grew 15.2% for the same period. For the nine months ended June 24,
2006, net sales increased 12.2% over the 2005 period to $1.89 billion,
while comparable grocery store sales grew 11.0%. Excluding
high-dollar, lower-margin gasoline sales, comparable grocery store
sales grew 10.2% for the quarter and 7.7% for the nine-month period.
    Easter sales occurred in the June quarter of fiscal 2006 and the
March quarter of fiscal 2005. Adjusted for the effect of Easter sales,
the Company estimates that third quarter 2006 comparable grocery store
sales increased 13.8%, compared to the third quarter of 2005.
    Gross profit dollars for the three- and nine-month periods ended
June 2006 increased $20.0 million and $44.1 million, respectively,
compared to the same periods of fiscal 2005. Gross profit, as a
percentage of sales, decreased to 24.8% for the June 2006 quarter,
compared to 25.3% for the same quarter last year. For the nine-month
period, gross profit as a percentage of sales decreased to 24.9% in
2006 compared to 25.4% in 2005. The effect of lower overall margins in
the gasoline department was the primary contributor to the decrease in
gross profit as a percentage of sales. Excluding the effect of
gasoline sales, retail grocery segment gross margins for the fiscal
2006 three- and nine-month periods were within 50 basis points of such
margins for the same periods of 2005.
    Operating and administrative expenses for the June 2006 quarter
decreased as a percentage of sales to 19.9% compared to 21.6% in the
June 2005 quarter. Operating and administrative expenses for the June
2006 nine-month period decreased as a percentage of sales to 20.6%
compared to 21.8% in the June 2005 nine-month period. Operating and
administrative expenses declined as a percentage of sales (both with
and without gasoline sales and expenses) due primarily to the
increased sales volume. Ingles operated 197 stores at the end of June
2006, compared to 195 stores at the end of June 2005.
    Combined net rental income and other income, net totaled $1.8
million for the June 2006 quarter compared to $2.4 million for the
June 2005 quarter, and $5.3 million for the nine-month 2006 period
compared to $5.7 million for the nine-month 2005 period. Lower rental
income and higher shopping center expenses accounted for most of the
decreases.
    Interest expense decreased $0.4 million and $1.8 million for the
three- and nine-month periods ended June 2006, respectively, compared
to the same periods ended June 2005 due to a reduction in total debt
from $579.7 million at June 25, 2005, to $555.4 million at June 24,
2006.
    Net income for the June 2006 quarter totaled $13.8 million, 108.9%
higher than net income of $6.6 million for the June 2005 quarter.
Basic and diluted earnings per share for the Company's publicly traded
Class A common stock were $0.59 and $0.57 per share, respectively, for
the June 2006 quarter compared to $0.29 and $0.27 per share,
respectively, for the June 2005 quarter.
    Net income for the nine months ended June 24, 2006 totaled $31.1
million, 80.9% higher than net income of $17.2 million for the nine
months ended June 25, 2005. Basic and diluted earnings per share for
the Company's publicly traded Class A common stock were $1.33 and
$1.27 per share, respectively, for the June 2006 nine-month period
compared to $0.75 and $0.71 per share, respectively, for the June 2005
nine-month period.
    Robert P. Ingle, chief executive officer, stated, "Our good
results are sales driven. We've had successful promotions, improved
our store base and offered both convenience and value to our
customers. Our customer visits are up and they're purchasing more each
visit than they did last year. This growth also allows us to spread
fixed expenses over more sales dollars to the benefit of our customers
and shareholders."
    During the June 2006 nine-month period, Ingles completed one new
store and three replacement stores, closed one store and purchased
seven future store sites. Including additions at new or replacement
stores, the Company added eight fuel stations and three pharmacies.
Capital expenditures for the June 2006 nine-month period totaled $66.8
million. For the balance of the fiscal year, Ingles expects to open
one remodeled store, purchase three sites for future expansion, and
add four new fuel stations and a pharmacy to existing store
properties. Capital expenditures for the entire fiscal year are
expected to be approximately $90 million, including expenditures for
stores to open in fiscal 2007.

    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 2005 Form 10-K and 2006 Forms 10-Q.

    Ingles Markets, Incorporated is a leading supermarket chain with
operations in six southeastern states. Headquartered in Asheville,
North Carolina, the Company operates 197 supermarkets. In conjunction
with its supermarket operations, the Company also operates 74
neighborhood shopping centers, all but 17 of which contain an Ingles
supermarket. The Company's Class A Common Stock is traded on The
NASDAQ Stock Market's Global Market under the symbol IMKTA. For more
information about the Company, visit Ingles' website at
www.ingles-markets.com.

                     INGLES MARKETS, INCORPORATED
             (Amounts in thousands except per share data)

                    Unaudited Financial Highlights

                          Three Months Ended       Nine Months Ended
                        ---------------------   ----------------------
                         June 24,    June 25,     June 24,    June 25,
                          2006        2005         2006        2005
                          ----        ----         ----        ----

Net sales              $ 659,212   $ 566,656   $1,889,255   $1,683,198
Gross profit             163,151     143,123      471,237      427,103
Operating and
 administrative
 expenses                131,122     122,364      389,629      366,654
Rental income, net         1,431       1,838        4,016        4,389
Income from operations    33,460      22,597       85,624       64,838
Other income, net            446         638        1,266        1,323
Interest expense          12,184      12,592       36,737       38,550
Income taxes               7,880       4,017       19,100       10,448
Net income             $  13,842  $    6,626   $   31,053   $   17,163

Basic earnings
 per common
 share - Class A       $    0.59  $     0.29   $     1.33   $     0.75
Basic earnings
 per common
 share - Class B       $    0.54  $     0.26   $     1.21   $     0.68
Diluted earnings
 per common
 share - Class A       $    0.57  $     0.27   $     1.27   $     0.71
Diluted earnings
 per common
 share - Class B       $    0.54  $     0.26   $     1.21   $     0.68

Additional selected
 information:
Depreciation and
 amortization expense  $  14,765  $   13,798   $   44,297   $   42,288
Rent expense           $   5,359  $    6,403   $   16,598   $   20,581


           Condensed Consolidated Balance Sheets (Unaudited)

                                            June 24,        Sept. 24,
                                             2006             2005
                                             ----             ----
ASSETS
  Cash and cash equivalents             $     22,281    $      50,626
  Receivables-net                             40,758           39,079
  Inventories                                216,754          204,113
  Other current assets                        11,287           10,639
  Property and equipment-net                 762,748          744,163
  Other assets                                17,150           17,385
                                        ------------    -------------
TOTAL ASSETS                            $  1,070,978    $   1,066,005
                                        ============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current maturities of
   long-term debt                       $     12,174    $      16,413
  Accounts payable, accrued
   expenses and current portion
   of other long-term liabilities            189,792          184,462
  Deferred income taxes                       24,576           31,246
  Long-term debt                             543,271          553,015
  Other long-term liabilities                  4,163            4,020
                                        -------------   -------------
     Total Liabilities                       773,976          789,156
  Stockholders' equity                       297,002          276,849
                                        ------------    -------------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                  $  1,070,978    $   1,066,005
                                        ============    =============


    CONTACT: Ingles Markets, Incorporated
             Ron Freeman, 828-669-2941 (Ext. 223)


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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