10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 25, 2011

¨ 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  þ    No  ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer                    þ
Non-accelerated filer    ¨    (Do not check if a smaller reporting company.)	Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ.

As of July 25, 2011, the Registrant had 12,939,533 shares of Class A Common Stock, $0.05 par value per share, outstanding and 11,503,726 shares of Class B Common Stock, $0.05 par value per share, outstanding.

EXPLANATORY NOTE

Ingles Markets, Incorporated, is filing this Amendment No. 1 (the “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarter ended June 25, 2011 (the “Form 10-Q”), filed with the Securities and Exchange Commission (“SEC”) on August 9, 2011, for the sole purpose of furnishing the XBRL Interactive Data Files as Exhibit 101.

No other changes have been made to the Form 10-Q. This Form 10-Q/A continues to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any related disclosures made in the Form 10-Q.

Users of this data are advised that pursuant to Rule 406T of Regulation S-T, these interactive data files attached as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Item 6. EXHIBITS

(a) Exhibits.

3.1	Articles of Incorporation of Ingles Markets, Incorporated (included as Exhibit 3.1 to Ingles Markets, Incorporated’s Registration Statement on Form S-1, File No. 33-23919, previously filed with the Commission and incorporated herein by this reference).
3.2	Articles of Amendment to Articles of Incorporation of Ingles Markets, Incorporated (included as Exhibit 3.3 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 25, 2004, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference).
3.3	Amended and Restated By-Laws of Ingles Markets, Incorporated (included as Exhibit 99.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on August 30, 2007 and incorporated herein by this reference).
4.1	Articles 4 and 9 of the Articles of Incorporation of Ingles Markets, Incorporated (included as Exhibit 3.1 to Ingles Markets, Incorporated’s Registration Statement on Form S-1, File No. 33-23919, and Exhibit 3.3 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 25, 2004, File No. 0-14706, respectively, each of which were previously filed with the Commission and are incorporated herein by this reference).
4.2	Articles 2, 3, 10, 11 and 14 of the Amended and Restated By-Laws of Ingles Markets, Incorporated (included as Exhibit 99.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on August 30, 2007 and incorporated herein by this reference).
4.3	Indenture, dated as of May 12, 2009, between Ingles Markets, Incorporated and U.S. Bank, National Association, as Trustee, governing the 8 7/8% Senior Notes Due 2017, including the form of unregistered 8 7/8% Senior Note Due 2017 (included as Exhibit 4.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on May 15, 2009 and incorporated herein by this reference).
4.4	Registration Rights Agreement, dated May 12, 2009, among the Company and Banc of America Securities LLC, Wachovia Capital Markets, LLC and BB&T, a division of Scott & Stringfellow, LLC (included as Exhibit 4.3 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on May 15, 2009 and incorporated herein by this reference).
10.1	Exhibits and Schedules to Credit Agreement dated May 12, 2009, among the Company and the lenders party thereto, Bank of America, as administrative agent, swing line lender and l/c issuer, Branch Banking and Trust Company, as syndication agent, Wachovia Bank, National Association, as documentation agent, and Banc of America Securities LLC, Branch Banking and Trust Company and Wachovia Capital Markets, LLC, as joint lead arrangers and joint book managers (included as Exhibit 10.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on May 15, 2009 and incorporated herein by this reference).
10.2	Second Amendment to the Credit Agreement dated as of May 12, 2009, among the Company the lenders from time to time party thereto, Bank of America, N.A., as administrative agent, swing line lender and l/c issuer, and the other agents, joint lead arrangers and joint book managers party thereto (included as Exhibit 10.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on January 4, 2011 and incorporated herein by this reference).
10.3	Credit Agreement, dated May 12, 2009, among the Company and the lenders party thereto, Bank of America, as administrative agent, swing line lender and l/c issuer, Branch Banking and Trust Company, as syndication agent, Wachovia Bank, National Association, as documentation agent, and Banc of America Securities LLC, Branch Banking and Trust Company and Wachovia Capital Markets, LLC, as joint lead arrangers and book managers (included as Exhibit 10.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on May 15, 2009 and incorporated herein by this reference).
10.4	Exhibits and Schedules to Credit Agreement dated May 12, 2009, among the Company and the lenders party thereto, Bank of America, as administrative agent, swing line lender and l/c issuer, Branch Banking and Trust Company, as syndication agent, Wachovia Bank, National Association, as documentation agent, and Banc of America Securities LLC, Branch Banking and Trust Company and Wachovia Capital Markets, LLC, as joint lead arrangers and joint book managers (included as Exhibit 10.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on May 15, 2009 and incorporated herein by this reference).
31.1*	Rule 13a-14(a) Certification
31.2*	Rule 13a-14(a) Certification
32.1*	Certification Pursuant to 18 U.S.C. Section 1350
32.2*	Certification Pursuant to 18 U.S.C. Section 1350
101	The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended June 25, 2011, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Earnings; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Comprehensive Income; and (v) the Notes to the Consolidated Financial Statements.

* Previously filed on Form 10-Q for the quarterly period ended June 25, 2011, filed with the Securities and Exchange Commission on August 9, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 10-Q/A to be signed on its behalf by the undersigned thereunto duly authorized.

	INGLES MARKETS, INCORPORATED
Date: August 25, 2011	/s/ Robert P. Ingle, II
	Robert P. Ingle, II
	Chief Executive Officer
Date: August 25, 2011	/s/ Ronald B. Freeman
	Ronald B. Freeman
	Vice President-Finance and Chief Financial Officer

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 25, 2011	Sep. 25, 2010
Preferred stock, par value	$ 0.05	$ 0.05
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Class A Common Stock [Member]
Common stock, par value	$ 0.05	$ 0.05
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	12,939,533	12,889,433
Common stock, shares outstanding	12,939,533	12,889,433
Class B Common Stock [Member]
Common stock, par value	$ 0.05	$ 0.05
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	11,503,726	11,582,826
Common stock, shares outstanding	11,503,726	11,582,826

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Condensed Consolidated Statements Of Income (USD $)	3 Months Ended		9 Months Ended
	Jun. 25, 2011	Jun. 26, 2010	Jun. 25, 2011	Jun. 26, 2010
Net sales	$ 910,978,159	$ 856,128,148	$ 2,654,102,227	$ 2,534,086,573
Cost of goods sold	709,638,537	659,241,460	2,064,645,838	1,966,070,348
Gross profit	201,339,622	196,886,688	589,456,389	568,016,225
Operating and administrative expenses	169,762,486	164,842,080	505,586,653	488,047,319
Rental income, net	575,418	458,527	1,443,413	1,127,348
Gain (loss) from sale or disposal of assets	2,655,912	129,571	2,676,674	(63,145)
Income from operations	34,808,466	32,632,706	87,989,823	81,033,109
Other income, net	945,421	1,533,480	3,146,470	3,229,883
Interest expense	15,344,197	16,206,484	46,912,397	48,956,253
Income before income taxes	20,409,690	17,959,702	44,223,896	35,306,739
Income tax expense (benefit):
Current	10,091,000	3,598,000	22,070,000	10,987,000
Deferred	(2,406,000)	2,916,750	(5,945,000)	1,711,250
Total income tax expense (benefit)	7,685,000	6,514,750	16,125,000	12,698,250
Net income	$ 12,724,690	$ 11,444,952	$ 28,098,896	$ 22,608,489
Class A Common Stock [Member]
Per share amounts:
Basic earnings per common share	$ 0.54	$ 0.49	$ 1.20	$ 0.97
Diluted earnings per common share	$ 0.52	$ 0.46	$ 1.15	$ 0.92
Cash dividends per common share:
Common stock	$ 0.165	$ 0.165	$ 0.495	$ 0.495
Class B Common Stock [Member]
Per share amounts:
Basic earnings per common share	$ 0.49	$ 0.44	$ 1.09	$ 0.88
Diluted earnings per common share	$ 0.49	$ 0.44	$ 1.09	$ 0.88
Cash dividends per common share:
Common stock	$ 0.150	$ 0.150	$ 0.450	$ 0.450

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Document And Entity Information	9 Months Ended
	Jun. 25, 2011	Jul. 25, 2011 Class A Common Stock [Member]	Jul. 25, 2011 Class B Common Stock [Member]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 25, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Entity Registrant Name	INGLES MARKETS INC
Entity Central Index Key	0000050493
Current Fiscal Year End Date	--09-24
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		12,939,533	11,503,726

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Accrued Expenses And Current Portion Of Other Long-Term Liabilities

9 Months Ended

Jun. 25, 2011

Accrued Expenses And Current Portion Of Other Long-Term Liabilities

Accrued Expenses And Current Portion Of Other Long-Term Liabilities

F. ACCRUED EXPENSES AND CURRENT PORTION OF OTHER LONG-TERM LIABILITIES

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

	June 25, 2011		September 25, 2010
Property, payroll and other taxes payable	$	13,742,788	$	15,829,531
Salaries, wages and bonuses payable		22,468,824		23,291,110
Self-insurance liabilities		23,657,944		22,340,050
Income taxes payable		6,714,757		—
Interest		7,036,131		19,531,257
Other		4,718,140		4,106,817
	$	78,338,584	$	85,098,765

Self-insurance liabilities are established for workers' compensation and employee group medical and dental benefits based on claims filed and estimates of claims incurred but not reported. The Company is insured for covered costs in excess of $750,000 per occurrence for workers' compensation and $325,000 per covered person for medical care benefits for a policy year. Employee insurance expense, including workers' compensation and medical care benefits, net of employee contributions, totaled $8.0 million and $5.2 million for each of the three-month periods ended June 25, 2011 and June 26, 2010, respectively. For the nine-month periods ended June 25, 2011 and June 26, 2010, employee insurance expense, net of employee contributions, totaled $24.9 million and $21.8 million, respectively.

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Fair Values Of Financial Instruments

9 Months Ended

Jun. 25, 2011

Fair Values Of Financial Instruments

Fair Values Of Financial Instruments

K. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term maturity of these instruments. At June 25, 2011 and September 25, 2010, the fair value of the Company's debt was estimated at $906.1 million and $873.0 million, respectively, primarily using market yields and taking into consideration the underlying terms of the debt. Such fair value was more than the carrying value of debt at June 25, 2011 by $49.0 million and more than the carrying value of debt at September 25, 2010 by $55.5 million.

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Restatement Of Prior Financial Statements

9 Months Ended

Jun. 25, 2011

Restatement Of Prior Financial Statements

Restatement Of Prior Financial Statements

B. RESTATEMENT OF PRIOR FINANCIAL STATEMENTS

While researching alternative methods to calculate retained claim liability for our self-insured workers compensation insurance program, we discovered errors in the application of actuarial methods used to estimate the obligation for future payments resulting from claims due to past events. These errors primarily related to the Company's selection of loss development factors and the application of such factors to the population of claims. The impact of these prior period misstatements to our consolidated financial statements resulted in the understatement of workers compensation expense with a corresponding understatement of workers compensation self insurance liabilities over multiple fiscal years through September 25, 2010.

In accordance with applicable accounting guidance, an adjustment to the financial statements for each individual prior period presented is required to reflect the correction of the period-specific effects of the change, if material. Based on our evaluation of relevant quantitative and qualitative factors, we determined the identified corrections are immaterial to the Company's individual prior period consolidated financial statements, however, the cumulative correction of the prior period errors would be material to our current year Condensed Consolidated Statements of Income. Consequently, we have restated the accompanying Condensed Consolidated Balance Sheet as of September 25, 2010 and the opening September 25, 2010 and September 26, 2009 balances presented in our Condensed Consolidated Statement of Changes in Stockholders Equity as of June 25, 2011, appearing herein, from amounts previously reported to correct the prior period adjustments by the understatement of workers compensation self insurance liabilities with a corresponding reduction to retained earnings.

The impact of these adjustments is not material to our 2010 and 2009 statement of cash flows as the impact to individual line items within operating activities is not material and there was no net impact to cash provided by operating activities, cash used in investing activities and cash used in financing activities. However, we will restate the 2010 and 2009 statement of cash flows as it appears in our 2011 Annual Report on Form 10-K to reflect changes to individual line items within operating activities.

We have also adjusted the Condensed Consolidated Statements of Income for the three and nine months ended June 26, 2010 by approximately $380,000 ($224,000 net of tax) and approximately $1.1 million ($672,000 net of tax), respectively, to reflect the additional workers compensation expense. We have also adjusted the Condensed Consolidated Statement of Cash Flows for the nine months ended June 26, 2010 to reflect changes to the individual line items within operating activities. The current year effect of the adjustment is not material to the condensed consolidated financial statements.

The tables below summarize the effect of the restatement of previously reported consolidated financial statements for the periods that will be presented in our 2011 Annual report on Form 10-K (in thousands, except per share data):

	As of September 25, 2010
	As  Previously Reported		Adjustment			As Restated
Consolidated Balance Sheet
Deferred income taxes (current)	$	6,070	$	3,058		$	9,128
Other current assets		16,545		3,058			19,603
Total assets		1,529,300		3,058			1,532,358
Self-insurance liabilities		14,523		7,817			22,340
Accrued expenses and current portion of other long-term liabilities		77,282		7,817			85,099
Retained earnings		295,023		(4,759	)		290,264
Total stockholders' equity		413,840		(4,759	)		409,081
Total liabilities and stockholders' equity		1,529,300		3,058			1,532,358

	Year Ended September 25, 2010							Year Ended September 26, 2009
	As Previously Reported		Adjustment			As Restated		As Previously Reported		Adjustment			As Restated
Consolidated Statement of Income
Operating and administrative expenses	$	653,674	$	1,518		$	655,192	$	632,410	$	1,521		$	633,931
Income from operations		110,965		(1,518	)		109,447		113,223		(1,521	)		111,702
Income before income taxes		50,335		(1,518	)		48,817		46,234		(1,521	)		44,713
Income tax expense (benefit):
Deferred		5,745		(621	)		5,124		16,803		(626	)		16,177
Net income		31,739		(897	)		30,842		28,828		(895	)		27,933
Earnings per share:
Class A Common Stock
Basic		1.35		(0.03	)		1.32		1.23		(0.04	)		1.19
Diluted		1.30		(0.04	)		1.26		1.18		(0.04	)		1.14
Class B Common Stock
Class A		1.23		(0.03	)		1.20		1.12		(0.04	)		1.08
Class B		1.23		(0.03	)		1.20		1.12		(0.04	)		1.08

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Dividends

9 Months Ended

Jun. 25, 2011

Dividends

Dividends

H. DIVIDENDS

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 21, 2011, January 20, 2011 and October 21, 2010 to stockholders of record on April 7, 2011, January 6, 2011 and October 7, 2010, respectively.

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Common Stock And Calculation Of Earnings Per Common Share

9 Months Ended

Jun. 25, 2011

Common Stock And Calculation Of Earnings Per Common Share

Common Stock And Calculation Of Earnings Per Common Share

I. COMMON STOCK AND CALCULATION OF EARNINGS PER COMMON SHARE

The Company has two classes of common stock: Class A which is publicly traded, and Class B, which has no public market. The Class B Common Stock has restrictions on transfer; however, each share is convertible into one share of Class A Common Stock at any time. Each share of Class A Common Stock has one vote per share and each share of Class B Common Stock has ten votes per share. Each share of Class A Common Stock is entitled to receive cash dividends equal to 110% of any cash dividend paid on Class B Common Stock.

The Company calculates earnings per share for its Class A Common Stock and Class B Common Stock in accordance with FASB ASC Topic 260.

The two-class method of computing basic earnings per share for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated undistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class of stock. Diluted earnings per share is calculated assuming conversion of all shares of Class B Common Stock to shares of Class A Common Stock on a share-for-share basis. The tables below reconcile the numerators and denominators of basic and diluted earnings per share for current and prior periods.

	Three Months Ended June 25, 2011				Nine Months Ended June 25, 2011
	Class A		Class B		Class A		Class B
Numerator: Allocated net income
Net income allocated, basic	$	7,015,699	$	5,708,991	$	15,480,872	$	12,618,024
Conversion of Class B to Class A shares		5,708,991		—		12,618,024		—
Net income allocated, diluted	$	12,724,690	$	5,708,991	$	28,098,896	$	12,618,024
Denominator: Weighted average shares outstanding
Weighted average shares outstanding, basic		12,901,080		11,542,179		12,894,032		11,556,875
Conversion of Class B to Class A shares		11,542,179		—		11,556,875		—
Weighted average shares outstanding, diluted		24,443,259		11,542,179		24,450,907		11,556,875
Earnings per share
Basic	$	0.54	$	0.49	$	1.20	$	1.09
Diluted	$	0.52	$	0.49	$	1.15	$	1.09

The per share amounts for the third quarter of fiscal 2010 and the nine months ended June 26, 2010 are based on the following amounts:

	Three Months Ended June 26, 2010				Nine Months Ended June 26, 2010
	Class A		Class B		Class A		Class B
Numerator: Allocated net income
Net income allocated, basic	$	6,298,765	$	5,146,187	$	12,430,408	$	10,178,081
Conversion of Class B to Class A shares		5,146,187		—		10,178,081		—
Net income allocated, diluted	$	11,444,952	$	5,146,187	$	22,608,489	$	10,178,081
Denominator: Weighted average shares outstanding
Weighted average shares outstanding, basic		12,888,707		11,583,552		12,888,641		11,607,794
Conversion of Class B to Class A shares		11,583,552		—		11,607,794		—
Weighted average shares outstanding, diluted		24,472,259		11,583,552		24,496,435		11,607,794
Earnings per share
Basic	$	0.49	$	0.44	$	0.97	$	0.88
Diluted	$	0.46	$	0.44	$	0.92	$	0.88

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Long-Term Debt

9 Months Ended

Jun. 25, 2011

Long-Term Debt

Long-Term Debt

G. LONG-TERM DEBT

In May 2009, the Company issued $575.0 million aggregate principal amount of senior notes due in 2017 (the "Notes") in a private placement. The Notes bear an interest rate of 8.875% per annum and were issued at a discount to yield 9.5% per annum.

The Company may redeem all or a portion of the Notes at any time on or after May 15, 2014 at the following redemption prices (expressed as percentages of the principal amount), if redeemed during the 12-month period beginning May 15 of the years indicated below:

Year
2013	104.438	%
2014	102.219	%
2015 and thereafter	100.000	%

In connection with the offering of the Notes, the Company entered into a new three-year $175.0 million line of credit and terminated three other lines of credit. At June 25, 2011, the Company had $175.0 million of total commitments available under the line of credit, with no borrowings outstanding.

The line of credit provides the Company with various interest rate options generally at rates less than prime. The line allows the Company to issue up to $30.0 million in unused letters of credit, of which $8.7 million of unused letters of credit were issued at June 25, 2011. The Company is not required to maintain compensating balances in connection with the line of credit.

On December 29, 2010, the Company completed the funding of $99.7 million of Recovery Zone Facility Bonds (the "Bonds") for: (A) acquisition, construction and equipping of an approximately 830,000 square foot new warehouse and distribution center and a new grocery store to be located in Buncombe County, North Carolina (the "Project"), and (B) the payment of certain expenses incurred in connection with the issuance of the Bonds. The final maturity date of the Bonds is January 1, 2036.

Bond proceeds were invested in a trust account with the Bond trustee. The Company receives disbursements from the account as it submits requisitions to the trustee for incurred Project costs. The account with the Bond trustee is listed in the line item "Restricted investments" on the Condensed Consolidated Balance Sheets and consists of money market deposits and United States Treasury securities which mature no later than September 2012. These investments are classified as available-for-sale and are stated at market value.

The Bonds were issued by the Buncombe County Industrial Facilities and Pollution Control Financing Authority and were purchased by certain financial institutions. Under a Continuing Covenant and Collateral Agency Agreement (the "Covenant Agreement") between the financial institutions and the Company, the financial institutions will hold the Bonds until January 1, 2017, subject to certain events. Mandatory redemption of the Bonds by the Company in the annual amount of $4,530,000 begins on January 1, 2014. The Company may redeem the Bonds without penalty or premium at any time prior to January 1, 2017.

Interest earned by bondholders on the Bonds is exempt from Federal and North Carolina income taxation. Initially, the interest rate on the Bonds is equal to one month LIBOR (adjusted monthly) plus a credit spread, adjusted to reflect the income tax exemption.

The Company's obligation to repay the Bonds is collateralized by the Project. Additional collateral may be required in order to meet certain loan to value criteria in the Covenant Agreement. The Covenant Agreement incorporates substantially all financial covenants included in the line of credit.

Also on December 29, 2010, the Company executed an amendment to extend the maturity of the line of credit from May 12, 2012 to December 29, 2015. All other terms of the Line Agreement remain in place.

The Notes, the Bonds and the line of credit 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 lines of credit 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 related to these lines of credit at June 25, 2011.

The Company's long-term debt agreements generally have cross-default provisions which could result in the acceleration of payments due under the Company's lines of credit and Notes indenture in the event of default under any one instrument.

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Condensed Consolidated Statements Of Cash Flows (USD $)	9 Months Ended
	Jun. 25, 2011	Jun. 26, 2010
Cash Flows from Operating Activities:
Net income	$ 28,098,896	$ 22,608,489
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	63,811,769	64,011,316
(Gain) loss on disposals of property and equipment	(2,676,674)	63,145
Receipt of advance payments on purchases contracts	2,714,583	2,677,167
Recognition of advance payments on purchases contracts	(2,090,196)	(2,536,045)
Deferred income taxes	(5,945,000)	1,711,250
Changes in operating assets and liabilities:
Receivables	(4,132,727)	(2,607,222)
Inventory	(18,952,000)	(11,879,441)
Other assets	65,706	9,632,296
Accounts payable and accrued expenses	13,285,851	(5,265,884)
Net Cash Provided by Operating Activities	74,180,208	78,415,071
Cash Flows from Investing Activities:
Purchase of certificates for deposit		(3,000,000)
Proceeds from maturities of certificates of deposit	6,000,000	15,000,000
Purchases of restricted investments	(95,736,465)
Proceeds from sales of property and equipment	111,560	1,434,109
Capital expenditures	(63,023,224)	(65,274,290)
Net Cash Used by Investing Activities	(152,648,129)	(51,840,181)
Cash Flows from Financing Activities:
Proceeds from short-term borrowings	172,829,090
Payments on short-term borrowings	(172,829,090)
Proceeds from other long-term borrowings	99,740,000
Principal payments on long-term borrowings	(60,139,539)	(23,737,858)
Common stock repurchases	(543,460)	(593,200)
Dividends paid	(11,583,882)	(11,605,452)
Net Cash Provided (Used) by Financing Activities	27,473,119	(35,936,510)
Net Decrease in Cash and Cash Equivalents	(50,994,802)	(9,361,620)
Cash and cash equivalents at beginning of year	57,854,587	59,535,848
Cash and Cash Equivalents at End of Period	$ 6,859,785	$ 50,174,228

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New Accounting Pronouncements

9 Months Ended

Jun. 25, 2011

New Accounting Pronouncements

New Accounting Pronouncements

C. NEW ACCOUNTING PRONOUNCEMENTS

There were no accounting standards adopted in the nine-month period ended June 25, 2011.

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Allowance For Doubtful Accounts

9 Months Ended

Jun. 25, 2011

Allowance For Doubtful Accounts

Allowance For Doubtful Accounts

D. ALLOWANCE FOR DOUBTFUL ACCOUNTS

Receivables are presented net of an allowance for doubtful accounts of $454,000 and $596,000 at June 25, 2011 and September 25, 2010, respectively.

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Subsequent Events

9 Months Ended

Jun. 25, 2011

Subsequent Events

Subsequent Events

L. SUBSEQUENT EVENTS

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the day the financial statements were issued.

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Income Taxes

9 Months Ended

Jun. 25, 2011

Income Taxes

Income Taxes

E. INCOME TAXES

The Company's continuing practice is to recognize interest and penalties related to uncertain tax positions and related matters in income tax expense. As of June 25, 2011, the Company had approximately $53,000 accrued for interest and penalties.

The Company's effective tax rate differs from the federal statutory rate primarily as a result of state income taxes and tax credits. As of June 25, 2011, the Company had gross unrecognized tax benefits of approximately $140,000, all of which, if recognized, would affect the effective tax rate. The Company does not expect that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

The Company files income tax returns with federal and various state jurisdictions. With few exceptions, the Company is no longer subject to state income tax examinations by tax authorities for the years before 2005. Additionally, the Internal Revenue Service has completed its examination of the Company's U.S. Federal income tax returns filed through fiscal 2008. As of June 25, 2011 certain of the Company's tax returns for fiscal 2006-2009 are under examination by certain state tax authorities.

The Company had approximately $2.9 million and $6.0 million of refundable income taxes included in the caption "Other current assets" in the Condensed Consolidated Balance Sheets at June 25, 2011 and September 25, 2010, respectively.

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Condensed Consolidated Statements Of Changes In Stockholders' Equity (USD $)	Class A Common Stock [Member]	Class B Common Stock [Member]	Paid-In Capital In Excess Of Par Value [Member]	Retained Earnings [Member]	Total
Balance at Sep. 26, 2009	$ 644,430	$ 581,183	$ 118,184,132	$ 274,891,998	$ 394,301,743
Balance, shares at Sep. 26, 2009	12,888,608	11,623,651
Net income				22,608,489	22,608,489
Dividends paid				(11,605,452)	(11,605,452)
Common stock conversions	38	(38)
Common stock conversions, shares	750	(750)
Stock repurchases, at cost		(2,000)	(591,200)		(593,200)
Stock repurchases, at cost, shares		(40,000)
Balance at Jun. 26, 2010	644,468	579,145	117,592,932	285,895,035	404,711,580
Balance, shares at Jun. 26, 2010	12,889,358	11,582,901
Balance at Sep. 25, 2010	644,472	579,141	117,592,932	290,264,244	409,080,789
Balance, shares at Sep. 25, 2010	12,889,433	11,582,826
Net income				28,098,896	28,098,896
Dividends paid				(11,583,882)	(11,583,882)
Common stock conversions	2,505	(2,505)
Common stock conversions, shares	50,100	(50,100)
Stock repurchases, at cost		(1,450)	(542,010)		(543,460)
Stock repurchases, at cost, shares		(29,000)
Balance at Jun. 25, 2011	$ 646,977	$ 575,186	$ 117,050,922	$ 306,779,258	$ 425,052,343
Balance, shares at Jun. 25, 2011	12,939,533	11,503,726

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Basis Of Preparation

9 Months Ended

Jun. 25, 2011

Basis Of Preparation

Basis Of Preparation

A. BASIS OF PREPARATION

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of Ingles Markets, Incorporated and Subsidiaries (the "Company") as of June 25, 2011, the results of operations for the three-month and nine-month periods ended June 25, 2011 and June 26, 2010, and the changes in stockholders' equity and cash flows for the nine-month periods ended June 25, 2011 and June 26, 2010. The adjustments made are of a normal recurring nature. Certain information and footnote disclosures normally 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 25, 2010 filed by the Company under the Securities Exchange Act of 1934 on November 30, 2010.

The results of operations for the three-month and nine-month periods ended June 25, 2011 are not necessarily indicative of the results to be expected for the full fiscal year.

Certain amounts in the Condensed Consolidated Statements of Cash Flows for the nine months ended June 26, 2010 have been reclassified to conform to the current-year presentation of certificates of deposit.

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Lines Of Business

9 Months Ended

Jun. 25, 2011

Lines Of Business

Lines Of Business

J. LINES OF BUSINESS

The Company operates three lines of business: retail grocery sales, shopping center rentals, and a fluid dairy processing plant. All of the Company's operations are domestic. Information about the Company's operations by lines of business (in thousands) is as follows:

	Three Months Ended						Nine Months Ended
	June 25, 2011			June 26, 2010			June 25, 2011		June 26, 2010
Revenues from unaffiliated customers:
Grocery sales	$	876,724		$	826,969		$	2,558,155	$	2,448,692
Shopping center rentals		2,330			2,288			6,901		6,893
Fluid dairy		34,255			29,160			95,948		85,395
Total revenues from unaffiliated customers	$	913,309		$	858,417		$	2,661,004	$	2,540,980
Income from operations:
Grocery sales	$	31,371		$	29,552		$	77,760	$	71,286
Shopping center rentals		575			458			1,443		1,127
Fluid dairy		2,862			2,623			8,787		8,620
Total income from operations	$	34,808		$	32,633		$	87,990	$	81,003
	June 25, 2011			September 25, 2010
Assets:
Grocery sales	$	1,439,166		$	1,384,496
Shopping center rentals		118,485			119,097
Fluid dairy		35,739			30,857
Elimination of intercompany receivable		(2,347	)		(2,092	)
Total assets	$	1,591,043		$	1,532,358

Sales by product category (amounts in thousands) are as follows:

	Three Months Ended				Nine Months Ended
	June 25, 2011		June 26, 2010		June 25, 2011		June 26, 2010
Grocery	$	342,703	$	332,347	$	1,047,414	$	1,025,527
Non-foods		175,412		175,491		517,574		511,361
Perishables		212,057		204,781		615,630		585,464
Gasoline		146,552		114,350		377,537		326,340
Total grocery segment	$	876,724	$	826,969	$	2,558,155	$	2,448,692

The grocery category includes grocery, dairy, and frozen foods.

The non-foods include alcoholic beverages, tobacco, pharmacy, health and video.

The perishables category includes meat, produce, deli and bakery.

Revenue from shopping center rentals is reported on the rental income, net line of the income statements. Grocery and fluid dairy revenues are included in the caption "Net sales" in the Condensed Consolidated Statements of Income.

For the three-month periods ended June 25, 2011 and June 26, 2010, respectively, the fluid dairy segment had $14.8 million and $13.4 million in sales to the grocery sales segment. The fluid dairy segment had $43.8 million and $41.7 million in sales to the grocery sales segment for the nine-month periods ended June 25, 2011 and June 26, 2010, respectively. These sales have been eliminated in consolidation and are excluded from the amounts in the table above.

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Condensed Consolidated Balance Sheets (USD $)	Jun. 25, 2011	Sep. 25, 2010
ASSETS
Cash and cash equivalents	$ 6,859,785	$ 57,854,587
Certificates of deposit		6,000,000
Receivables-net	60,214,826	53,080,901
Inventories	305,382,753	286,430,753
Other current assets	16,835,114	19,603,242
Total Current Assets	389,292,478	422,969,483
Property and Equipment-Net	1,085,279,940	1,089,390,677
Restricted Investments	95,736,465
Other Assets	20,734,160	19,997,950
Total Assets	1,591,043,043	1,532,358,110
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt	74,319,186	92,184,965
Accounts payable-trade	155,189,052	141,690,162
Accrued expenses and current portion of other long-term liabilities	78,338,584	85,098,765
Total Current Liabilities	307,846,822	318,973,892
Deferred Income Taxes	67,714,000	72,213,000
Long-Term Debt	782,780,279	725,314,038
Other Long-Term Liabilities	7,649,599	6,776,391
Total Liabilities	1,165,990,700	1,123,277,321
Stockholders' Equity
Preferred stock, $0.05 par value; 10,000,000 shares authorized; no shares issued
Common stocks:
Paid-in capital in excess of par value	117,050,922	117,592,932
Retained earnings	306,779,258	290,264,244
Total Stockholders' Equity	425,052,343	409,080,789
Total Liabilities and Stockholders' Equity	1,591,043,043	1,532,358,110
Class A Common Stock [Member]
Common stocks:
Common stock, value	646,977	644,472
Class B Common Stock [Member]
Common stocks:
Common stock, value	$ 575,186	$ 579,141