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AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2020

AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $1.22 on net income available to common shareholders of $0.7 million for its second fiscal quarter ended March 31, 2020.

“Both of AMCON’s business segments are open for business. We are fully committed to our employees’ and customers’ success and safety during the rapidly evolving COVID-19 situation. While many of the states in which we operate have shelter in place orders, AMCON is an essential service provider and a key component of the United States supply chain as a distributor to convenience stores, truck stops, rural grocery stores as well as our role as a health food retailer,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Atayan also noted, “Our Bank Group provided an expanded 5-year credit facility and on April 1, 2020 we successfully closed on our investment in Team Sledd, both of which further our long term strategic objectives. We welcome all the Team Sledd Associates, Customers and Vendors to the AMCON Community.”

“AMCON’s deepest sympathies go out to all who have been impacted by the coronavirus outbreaks. We want to thank our Associates who worked tirelessly during these challenging times to ensure our customers and communities had the essential products and supplies they need. Our management teams’ first priority is to maintain the continuity of our workforce and our employee’s safety in order to best serve our customers’ interests. Our team has worked diligently addressing simultaneous supply chain challenges that impacted the entire United States as several industry suppliers’ temporarily shut down during the COVID-19 crisis,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Plummer also noted, “Our team built and operated a Virtual Trade Show on short notice, as the governmental restrictions on large meetings made the traditional Spring Trade Show not possible. The customer response to the Virtual Trade Show was excellent and we built solid momentum going forward. We were pleased to close March 31, 2020 with shareholders’ equity of $62.6 million and consolidated debt of $46.6 million.”

The wholesale distribution segment reported revenues of $324.9 million and operating income of $2.9 million for the second quarter of fiscal 2020. The retail health food segment reported revenues of $13.0 million and operating income of $0.1 million for the second quarter of fiscal 2020.

AMCON is a leading wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and chilled foods, and health and beauty care products with locations in Illinois, Missouri, Nebraska, North Dakota, South Dakota and Tennessee. AMCON’s Healthy Edge Retail Group also operates twenty-one (21) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Akin’s Natural Foods www.akins.com in its Midwest market, and Chamberlin's Natural Foods www.chamberlins.com and Earth Origins Market www.earthoriginsmarket.com in its Florida market.

This news release contains forward-looking statements that are subject to risks and uncertainties and which reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. A number of factors could affect the future results of the Company and could cause those results to differ materially from those expressed in the Company's forward-looking statements including, without limitation, availability of sufficient cash resources to conduct its business and meet its capital expenditures needs and the other factors described under Item 1.A. of the Company’s Annual Report on Form 10-K. Moreover, past financial performance should not be considered a reliable indicator of future performance. Accordingly, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements.

Visit AMCON Distributing Company's web site at: www.amcon.com

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Balance Sheets

March 31, 2020 and September 30, 2019

March

September

2020

2019

(Unaudited)

ASSETS

Current assets:

Cash

$

661,957

$

337,704

Accounts receivable, less allowance for doubtful accounts of $1.3 million at March 2020 and $0.9 million at September 2019

27,811,495

24,665,620

Inventories, net

84,912,508

102,343,517

Income taxes receivable

172,365

350,378

Prepaid and other current assets

6,986,997

7,148,459

Total current assets

120,545,322

134,845,678

Property and equipment, net

18,287,881

17,655,415

Operating lease right-of-use assets, net

19,689,507

Goodwill

4,436,950

4,436,950

Other intangible assets, net

500,000

500,000

Other assets

406,653

273,579

Total assets

$

163,866,313

$

157,711,622

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

22,985,979

$

18,647,572

Accrued expenses

6,650,445

8,577,972

Accrued wages, salaries and bonuses

3,107,209

3,828,847

Current operating lease liabilities

5,433,800

Current maturities of long-term debt

542,004

532,747

Total current liabilities

38,719,437

31,587,138

Credit facility

43,218,080

60,376,714

Deferred income tax liability, net

1,925,536

1,823,373

Long-term operating lease liabilities

14,597,065

Long-term debt, less current maturities

2,852,112

3,125,644

Other long-term liabilities

42,011

Shareholders’ equity:

Preferred stock, $.01 par value, 1,000,000 shares authorized

Common stock, $.01 par value, 3,000,000 shares authorized, 565,526 shares outstanding at March 2020 and 552,614 shares outstanding at September 2019

8,692

8,561

Additional paid-in capital

24,224,145

23,165,639

Retained earnings

67,184,900

66,414,397

Treasury stock at cost

(28,863,654)

(28,831,855)

Total shareholders’ equity

62,554,083

60,756,742

Total liabilities and shareholders’ equity

$

163,866,313

$

157,711,622

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and six months ended March 31, 2020 and 2019

For the three months ended March

For the six months ended March

2020

2019

2020

2019

Sales (including excise taxes of $87.5 million and $82.9 million, and $181.5 million and $175.9 million, respectively)

$

337,886,516

$

310,715,873

$

697,987,619

$

655,449,793

Cost of sales

317,193,063

290,126,453

656,449,455

614,228,235

Gross profit

20,693,453

20,589,420

41,538,164

41,221,558

Selling, general and administrative expenses

18,512,890

17,391,681

37,465,626

35,348,896

Depreciation and amortization

790,901

641,228

1,516,361

1,249,236

19,303,791

18,032,909

38,981,987

36,598,132

Operating income

1,389,662

2,556,511

2,556,177

4,623,426

Other expense (income):

Interest expense

387,263

396,576

859,686

719,526

Other (income), net

(29,920)

(36,280)

(36,697)

(39,636)

357,343

360,296

822,989

679,890

Income from operations before income taxes

1,032,319

2,196,215

1,733,188

3,943,536

Income tax expense

333,000

673,000

582,000

1,175,000

Net income available to common shareholders

$

699,319

$

1,523,215

$

1,151,188

$

2,768,536

Basic earnings per share available to common shareholders

$

1.24

$

2.49

$

2.04

$

4.50

Diluted earnings per share available to common shareholders

$

1.22

$

2.45

$

2.02

$

4.44

Basic weighted average shares outstanding

565,697

611,824

564,129

614,874

Diluted weighted average shares outstanding

571,852

620,769

569,856

623,848

Dividends declared and paid per common share

$

0.46

$

0.46

$

0.64

$

0.64

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders’ Equity

for the three and six months ended March 31, 2020 and 2019

Additional

Common Stock

Treasury Stock

Paid in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

THREE MONTHS ENDED MARCH 2019

Balance, January 1, 2019

856,039

$

8,561

(238,744)

$

(22,242,837)

$

23,110,713

$

64,796,415

$

65,672,852

Dividends on common stock, $0.18 per share

(116,164)

(116,164)

Compensation expense and issuance of stock in connection with equity-based awards

37,659

37,659

Repurchase of common stock

(24,527)

(2,268,761)

(2,268,761)

Net income

1,523,215

1,523,215

Balance, March 31, 2019

856,039

$

8,561

(263,271)

$

(24,511,598)

$

23,148,372

$

66,203,466

$

64,848,801

THREE MONTHS ENDED MARCH 2020

Balance, January 1, 2020

869,367

$

8,692

(303,534)

$

(28,840,011)

$

24,192,954

$

66,592,637

$

61,954,272

Dividends on common stock, $0.18 per share

(107,056)

(107,056)

Compensation expense and issuance of stock in connection with equity-based awards

31,191

31,191

Repurchase of common stock

(307)

(23,643)

(23,643)

Net income

699,319

699,319

Balance, March 31, 2020

869,367

$

8,692

(303,841)

$

(28,863,654)

$

24,224,145

$

67,184,900

$

62,554,083

Additional

Common Stock

Treasury Stock

Paid in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

SIX MONTHS ENDED MARCH 2019

Balance, October 1, 2018

844,089

$

8,441

(228,312)

$

(21,324,752)

$

22,069,098

$

63,848,030

$

64,600,817

Dividends on common stock, $0.64 per share

(413,100)

(413,100)

Compensation expense and issuance of stock in connection with equity-based awards

11,950

120

1,079,274

1,079,394

Repurchase of common stock

(34,959)

(3,186,846)

(3,186,846)

Net income

2,768,536

2,768,536

Balance, March 31, 2019

856,039

$

8,561

(263,271)

$

(24,511,598)

$

23,148,372

$

66,203,466

$

64,848,801

SIX MONTHS ENDED MARCH 2020

Balance, October 1, 2019

856,039

$

8,561

(303,425)

$

(28,831,855)

$

23,165,639

$

66,414,397

$

60,756,742

Dividends on common stock, $0.64 per share

(380,685)

(380,685)

Compensation expense and issuance of stock in connection with equity-based awards

13,328

131

1,058,506

1,058,637

Repurchase of common stock

(416)

(31,799)

(31,799)

Net income

1,151,188

1,151,188

Balance, March 31, 2020

869,367

$

8,692

(303,841)

$

(28,863,654)

$

24,224,145

$

67,184,900

$

62,554,083

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the six months ended March 31, 2020 and 2019

 

March

March

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

1,151,188

$

2,768,536

Adjustments to reconcile net income from operations to net cash flows from (used in)
operating activities:

Depreciation

1,516,361

1,217,986

Amortization

31,250

Loss (Gain) on sales of property and equipment

33,642

(17,832)

Equity-based compensation

446,114

622,390

Deferred income taxes

102,163

226,918

Provision for losses on doubtful accounts

390,000

59,000

Inventory allowance

55,746

240,699

Other

(42,011)

1,978

Changes in assets and liabilities:

Accounts receivable

(3,535,875)

3,353,602

Inventories

17,375,263

20,978,357

Prepaid and other current assets

(100,883)

(2,402,722)

Other assets

(133,074)

7,897

Accounts payable

4,401,077

(467,687)

Accrued expenses and accrued wages, salaries and bonuses

(1,432,939)

(2,275,795)

Income taxes receivable

178,013

273,742

Net cash flows from (used in) operating activities

20,404,785

24,618,319

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(2,245,139)

(2,159,232)

Proceeds from sales of property and equipment

23,700

Net cash flows from (used in) investing activities

(2,245,139)

(2,135,532)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facility

680,161,101

642,850,736

Repayments under revolving credit facility

(697,319,735)

(661,055,136)

Principal payments on long-term debt

(264,275)

(556,969)

Repurchase of common stock

(31,799)

(3,186,846)

Dividends on common stock

(380,685)

(413,100)

Net cash flows from (used in) financing activities

(17,835,393)

(22,361,315)

Net change in cash

324,253

121,472

Cash, beginning of period

337,704

520,644

Cash, end of period

$

661,957

$

642,116

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

927,322

$

774,784

Cash paid during the period for income taxes

301,824

674,340

Supplemental disclosure of non-cash information:

Equipment acquisitions classified in accounts payable

$

6,583

$

212,800

Issuance of common stock in connection with the vesting and exercise of
equity-based awards

990,653

1,005,792

Contacts:

Christopher H. Atayan
AMCON Distributing Company
Ph 402-331-3727

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