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AMCON Distributing Company Reports Results for the Quarter Ended June 30, 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 $2.77 on net income available to common shareholders of $1.6 million for its third fiscal quarter ended June 30, 2020.

“AMCON continues to fulfill our role as an essential service provider and a key component of the United States supply chain as a distributor to convenience stores, truck stops, and rural grocery stores. In addition, our retail health food segment provides nutritional supplements that are an important component of health, wellness and immunity support,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. “We continue to be focused on our long-term strategic plan and are actively seeking acquisitions and other opportunities to expand the enterprise.”

“Our management team and associates have worked around the clock to secure product and position the organizational and operational assets that are at the foundation of our philosophy as a customer focused service organization. We have many long-term relationships with our key vendors which enabled us to navigate a challenging operational environment and minimize disruptions from the pandemic,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer added, “We were pleased to close June 30, 2020 with shareholders’ equity of $64.0 million and consolidated debt of $59.6 million.”

The wholesale distribution segment reported revenues of $385.3 million and operating income of $4.4 million for the third quarter of fiscal 2020. The retail health food segment reported revenues of $11.5 million and an operating loss of $0.2 million for the third 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

June 30, 2020 and September 30, 2019

June

September

2020

2019

(Unaudited)

ASSETS

Current assets:

Cash

$

596,564

$

337,704

Accounts receivable, less allowance for doubtful accounts of $1.2 million at June 2020 and $0.9 million at September 2019

33,626,042

24,665,620

Inventories, net

82,009,219

102,343,517

Income taxes receivable

350,378

Prepaid and other current assets

7,259,528

7,148,459

Total current assets

123,491,353

134,845,678

Property and equipment, net

18,236,033

17,655,415

Operating lease right-of-use assets, net

19,705,044

Note receivable

3,500,000

Goodwill

4,436,950

4,436,950

Other intangible assets, net

500,000

500,000

Equity method investment

6,648,666

Other assets

399,943

273,579

Total assets

$

176,917,989

$

157,711,622

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

20,719,129

$

18,647,572

Accrued expenses

7,067,083

8,577,972

Accrued wages, salaries and bonuses

2,968,148

3,828,847

Income taxes payable

480,649

Current operating lease liabilities

5,486,963

Current maturities of long-term debt

546,657

532,747

Total current liabilities

37,268,629

31,587,138

Credit facility

56,384,002

60,376,714

Deferred income tax liability, net

1,820,511

1,823,373

Long-term operating lease liabilities

14,578,728

Long-term debt, less current maturities

2,713,798

3,125,644

Other long-term liabilities

167,755

42,011

Shareholders’ equity:

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

Common stock, $.01 par value, 3,000,000 shares authorized, 564,878 shares outstanding at June 2020 and 552,614 shares outstanding at September 2019

8,697

8,561

Additional paid-in capital

24,250,873

23,165,639

Retained earnings

68,657,375

66,414,397

Treasury stock at cost

(28,932,379

)

(28,831,855

)

Total shareholders’ equity

63,984,566

60,756,742

Total liabilities and shareholders’ equity

$

176,917,989

$

157,711,622

 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and nine months ended June 30, 2020 and 2019

For the three months ended June

For the nine months ended June

2020

2019

2020

2019

Sales (including excise taxes of $103.6 million and $98.0 million, and $285.1 million and $274.0 million, respectively)

$

396,854,324

$

369,981,516

$

1,094,841,943

$

1,025,431,309

Cost of sales

375,202,044

349,455,624

1,031,651,499

963,683,859

Gross profit

21,652,280

20,525,892

63,190,444

61,747,450

Selling, general and administrative expenses

18,377,641

18,513,048

55,843,266

53,861,943

Depreciation and amortization

801,683

620,142

2,318,045

1,869,378

19,179,324

19,133,190

58,161,311

55,731,321

Operating income

2,472,956

1,392,702

5,029,133

6,016,129

Other expense (income):

Interest expense

461,581

381,469

1,321,267

1,100,995

Other (income), net

(42,525

)

(15,446

)

(79,222

)

(55,081

)

419,056

366,023

1,242,045

1,045,914

Income from operations before income taxes

2,053,900

1,026,679

3,787,088

4,970,215

Income tax expense

586,000

361,000

1,168,000

1,536,000

Equity method investment earnings, net of tax

111,666

111,666

Net income available to common shareholders

$

1,579,566

$

665,679

$

2,730,754

$

3,434,215

Basic earnings per share available to common shareholders

$

2.79

$

1.12

$

4.84

$

5.65

Diluted earnings per share available to common shareholders

$

2.77

$

1.10

$

4.79

$

5.56

Basic weighted average shares outstanding

565,483

592,768

564,578

607,505

Diluted weighted average shares outstanding

569,902

606,278

569,873

617,887

Dividends declared and paid per common share

$

0.18

$

0.18

$

0.82

$

0.82

 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders’ Equity

for the three and nine months ended June 30, 2020 and 2019

Additional

Common Stock

Treasury Stock

Paid-in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

THREE MONTHS ENDED JUNE 2019

Balance, April 1, 2019

856,039

$

8,561

(263,271

)

$

(24,511,598

)

$

23,148,372

$

66,203,466

$

64,848,801

Dividends on common stock, $0.18 per share

(111,766

)

(111,766

)

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

36,801

36,801

Repurchase of common stock

(1

)

(141

)

(141

)

Net income

665,679

675,679

Balance, June 30, 2019

856,039

$

8,561

(263,272

)

$

(24,511,739

)

$

23,185,173

$

66,757,379

$

65,439,374

THREE MONTHS ENDED JUNE 2020

Balance, April 1, 2020

869,367

$

8,692

(303,841

)

$

(28,863,654

)

$

24,224,145

$

67,184,900

$

62,554,083

Dividends on common stock, $0.18 per share

(107,091

)

(107,091

)

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

500

5

26,728

26,733

Repurchase of common stock

(1,148

)

(68,725

)

(68,725

)

Net income

1,579,566

1,579,566

Balance, June 30, 2020

869,867

$

8,697

(304,989

)

$

(28,932,379

)

$

24,250,873

$

68,657,375

$

63,984,566

Additional

Common Stock

Treasury Stock

Paid-in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

NINE MONTHS ENDED JUNE 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, $0.82 per share

(524,866

)

(524,866

)

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

11,950

120

1,116,075

1,116,195

Repurchase of common stock

(34,960

)

(3,186,987

)

(3,186,987

)

Net income

3,434,215

3,434,215

Balance, June 30, 2019

856,039

$

8,561

(263,272

)

$

(24,511,739

)

$

23,185,173

$

66,757,379

$

65,439,374

NINE MONTHS ENDED JUNE 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, $0.82 per share

(487,776

)

(487,776

)

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

13,828

136

1,085,234

1,058,370

Repurchase of common stock

(1,564

)

(100,524

)

(100,524

)

Net income

2,730,754

2,730,754

Balance, June 30, 2020

869,867

$

8,697

(304,989

)

$

(28,932,379

)

$

24,250,873

$

68,657,375

$

63,984,566

 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the nine months ended June 30, 2020 and 2019

June

June

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

2,730,754

$

3,434,215

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

Depreciation

2,318,045

1,827,711

Amortization

41,667

Equity method investment earnings, net of income tax

(111,666

)

Loss (gain) on sales of property and equipment

17,042

(15,376

)

Equity-based compensation

765,704

1,035,128

Deferred income taxes

(2,862

)

112,439

Provision for losses on doubtful accounts

349,000

179,000

Inventory allowance

182,218

454,357

Changes in assets and liabilities:

Accounts receivable

(9,309,422

)

(3,209,941

)

Inventories

20,152,080

11,468,718

Prepaid and other current assets

(373,414

)

(5,698,021

)

Other assets

(126,364

)

19,712

Accounts payable

2,040,386

2,485,721

Accrued expenses and accrued wages, salaries and bonuses

(1,424,472

)

(1,460,935

)

Other long-term liabilities

125,744

2,967

Income taxes payable and receivable

794,027

157,836

Net cash flows from (used in) operating activities

18,126,800

10,835,198

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(2,901,134

)

(3,385,977

)

Proceeds from sales of property and equipment

16,600

56,200

Investment in equity method investee

(6,500,000

)

Issuance of note receivable

(3,500,000

)

Net cash flows from (used in) investing activities

(12,884,534

)

(3,329,777

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facility

1,083,878,207

1,022,309,940

Repayments under revolving credit facility

(1,087,870,919

)

(1,025,624,006

)

Principal payments on long-term debt

(397,936

)

(686,139

)

Proceeds from exercise of stock options

25,750

Repurchase of common stock

(100,524

)

(3,186,987

)

Dividends on common stock

(487,776

)

(524,866

)

Settlement and withholdings of equity-based awards

(30,208

)

Net cash flows from (used in) financing activities

(4,983,406

)

(7,712,058

)

Net change in cash

258,860

(206,637

)

Cash, beginning of period

337,704

520,644

Cash, end of period

$

596,564

$

314,007

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

1,387,381

$

1,140,562

Cash paid during the period for income taxes

376,835

1,265,725

Supplemental disclosure of non-cash information:

Equipment acquisitions classified in accounts payable

$

100,424

$

91,838

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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