AMCON Distributing Company Reports Results for the Fiscal Year Ended September 30, 2019

AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $5.25 on net income available to common shareholders of $3.2 million for the fiscal year ended September 30, 2019. AMCON incurred a loss of $0.41 per fully diluted share on a net loss available to common shareholders of $0.2 million for the fourth fiscal quarter ended September 30, 2019.

“We are pleased with our results for fiscal 2019. Our management philosophy and tradition of sustained excellence in customer service has positioned AMCON as a leader in the Convenience Distribution Industry,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We continue to expect a heightened level of capital expenditures in the coming years to support various strategic initiatives such as enhancements to our foodservice platform, investments in information technology, expansion of our geographic reach, and the continued redevelopment of our retail health food stores. In addition, we are seeking strategic acquisition opportunities.”

The wholesale distribution segment reported revenues of $1.3 billion and operating income of $17.3 million for fiscal 2019, and revenues and operating income of $356.7 million and $6.2 million, respectively, for the fourth fiscal quarter of fiscal 2019. The retail health food segment reported revenues of $44.2 million and an operating loss of $4.7 million for fiscal 2019, and revenues of $10.2 million and an operating loss of $4.2 million for the fourth quarter of fiscal 2019.

“Our customer base is growing and we are expanding our territories to serve them,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. He further noted, “We completed the redevelopment of our Bismarck, ND facility in the second half of the fiscal year and are proud to report the operational efficiencies and new capabilities these investments are providing to customers. The fall trade show season was well received by our customer base and enthusiastically supported by our vendor community. We are also delighted to announce the promotion of Douglas Sperry and Chad Pickel to Group Vice Presidents, reflecting their increased operational roles which span multiple branches.”

Mr. Plummer further added, “At September 30, 2019, our shareholders’ equity was $60.8 million, resulting in adjusted book value per share of $106.56. We turned our inventory 19 times and consolidated debt was $64.0 million. At its lowest point during fiscal 2019 our consolidated debt was $16.3 million.”

AMCON’s Healthy Edge Retail Group operates in a highly competitive and challenging environment. The organic and natural vendor community has supported our management team’s efforts to remerchandise our stores. Our strategy is to offer a broad selection of products supported with customer service as an alternative to the capital intensive big box retailers in the segment.

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 also operates twenty-two (22) 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
CONSOLIDATED BALANCE SHEETS
		September				September
		2019				2018
ASSETS
Current assets:
Cash		$	337,704			$	520,644
Accounts receivable, less allowance for doubtful accounts of $0.9 million at September 2019 and September 2018			24,665,620				31,428,845
Inventories, net			102,343,517				78,869,615
Income taxes receivable			350,378				272,112
Prepaid and other current assets			7,148,459				4,940,775
Total current assets			134,845,678				116,031,991
Property and equipment, net			17,655,415				15,768,484
Goodwill			4,436,950				4,436,950
Other intangible assets, net			500,000				3,414,936
Other assets			273,579				301,793
Total assets		$	157,711,622			$	139,954,154
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	18,647,572			$	20,826,834
Accrued expenses			8,577,972				8,556,620
Accrued wages, salaries and bonuses			3,828,847				3,965,733
Current maturities of long-term debt			532,747				1,096,306
Total current liabilities			31,587,138				34,445,493
Credit facility			60,376,714				35,428,597
Deferred income tax liability, net			1,823,373				1,782,801
Long-term debt, less current maturities			3,125,644				3,658,391
Other long-term liabilities			42,011				38,055
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 552,614 shares outstanding at September 2019 and 615,777 shares outstanding at September 2018			8,561				8,441
Additional paid-in capital			23,165,639				22,069,098
Retained earnings			66,414,397				63,848,030
Treasury stock at cost			(28,831,855	)			(21,324,752	)
Total shareholders’ equity			60,756,742				64,600,817
Total liabilities and shareholders’ equity		$	157,711,622			$	139,954,154

AMCON Distributing Company and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
		Fiscal Years Ended September
		2019				2018
Sales (including excise taxes of $370.2 million and $368.4 million, respectively)		$	1,392,388,157			$	1,322,306,658
Cost of sales			1,308,364,726				1,245,375,460
Gross profit			84,023,431				76,931,198
Selling, general and administrative expenses			72,182,883				66,781,234
Depreciation and amortization			2,617,591				2,318,146
Impairment charges			2,873,269				1,912,877
			77,673,743				71,012,257
Operating income			6,349,688				5,918,941
Other expense (income):
Interest expense			1,598,864				1,194,373
Other (income), net			(61,119	)			(54,042	)
			1,537,745				1,140,331
Income from operations before income taxes			4,811,943				4,778,610
Income tax expense			1,609,000				1,164,000
Net income available to common shareholders		$	3,202,943			$	3,614,610
Basic earnings per share available to common shareholders		$	5.36			$	5.47
Diluted earnings per share available to common shareholders		$	5.25			$	5.38
Basic weighted average shares outstanding			597,961				660,925
Diluted weighted average shares outstanding			609,836				672,449
Dividends declared and paid per common share		$	1.00			$	1.00

AMCON Distributing Company and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
														Additional
		Common Stock					Treasury Stock							Paid in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
Balance, October 1, 2017		831,438		$	8,314		(153,432	)		$	(13,601,302	)		$	20,825,919		$	60,935,911			$	68,168,842
Dividends on common stock, $1.00 per share		—		—			—				—				—			(702,491	)			(702,491	)
Compensation expense and issuance of stock in connection with equity-based awards		12,651			127		—				—				1,243,179			—				1,243,306
Repurchase of common stock		—		—			(74,880	)			(7,723,450	)			—			—				(7,723,450	)
Net income		—		—			—				—				—			3,614,610				3,614,610
Balance September 30, 2018		844,089		$	8,441		(228,312	)		$	(21,324,752	)		$	22,069,098		$	63,848,030			$	64,600,817
Dividends on common stock, $1.00 per share		—		—			—				—				—			(636,576	)			(636,576	)
Compensation expense and issuance of stock in connection with equity-based awards		11,950			120		—				—				1,096,541			—				1,096,661
Repurchase of common stock		—		—			(75,113	)			(7,507,103	)			—			—				(7,507,103	)
Net income		—		—			—				—				—			3,202,943				3,202,943
Balance, September 30, 2019		856,039		$	8,561		(303,425	)		$	(28,831,855	)		$	23,165,639		$	66,414,397			$	60,756,742

AMCON Distributing Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
		Fiscal Years Ended September
		2019				2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	3,202,943			$	3,614,610
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:
Depreciation			2,575,924				2,238,771
Amortization			41,667				79,375
Impairment charges			2,873,269				1,912,877
Gain on sales of property and equipment			(13,775	)			(4,070	)
Equity-based compensation			1,299,792				1,271,840
Deferred income taxes			40,572				(553,462	)
Provision for losses on doubtful accounts			21,000				90,000
Inventory allowance			560,610				(291,917	)
Other			3,956				3,955
Changes in assets and liabilities:
Accounts receivable			6,742,225				(828,442	)
Inventories			(24,034,512	)			(5,056,917	)
Prepaid and other current assets			(2,207,684	)			(633,032	)
Other assets			28,214				8,695
Accounts payable			(2,247,262	)			3,295,390
Accrued expenses and accrued wages, salaries and bonuses			(262,330	)			1,563,964
Income taxes receivable			(78,266	)			(816,181	)
Net cash flows from (used in) operating activities			(11,453,657	)			5,895,456
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(4,438,280	)			(3,226,107	)
Proceeds from sales of property and equipment			57,200				5,800
Net cash flows from (used in) investing activities			(4,381,080	)			(3,220,307	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility			1,427,544,804				1,424,929,646
Repayments under revolving credit facility			(1,402,596,687	)			(1,418,538,231	)
Principal payments on long-term debt			(1,096,306	)			(541,844	)
Repurchase of common stock			(7,507,103	)			(7,723,450	)
Dividends on common stock			(636,576	)			(702,491	)
Withholdings on the exercise of equity-based awards			(56,335	)			(101,200	)
Net cash flows from (used in) financing activities			15,651,797				(2,677,570	)
Net change in cash			(182,940	)			(2,421	)
Cash, beginning of period			520,644				523,065
Cash, end of period		$	337,704			$	520,644
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	1,561,531			$	1,137,691
Cash paid during the period for income taxes			1,646,694				2,533,643
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	69,253			$	1,253
Purchase of property financed with debt		—					1,575,000
Acquisition of assets financed with debt		—					699,717
Issuance of common stock in connection with the vesting and exercise of equity-based awards			1,005,792				1,183,091

AMCON Distributing Company and Subsidiaries

FISCAL YEAR 2019
(dollars in thousands, except per share data)		First			Second			Third			Fourth
Sales		$	344,734		$	310,716		$	369,982		$	366,957
Gross profit			20,632			20,589			20,526			22,276
Income (loss) from operations before income tax expense			1,747			2,196			1,027			(158	)
Net income (loss) available to common shareholders		$	1,245		$	1,523		$	666		$	(231	)
Basic earnings (loss) per share available to common shareholders		$	2.02		$	2.49		$	1.12		$	(.41	)
Diluted earnings (loss) per share available to common shareholders		$	1.99		$	2.45		$	1.10		$	(.41	)
FISCAL YEAR 2018
(dollars in thousands, except per share data)		First			Second			Third			Fourth
Sales		$	315,513		$	295,207		$	349,043		$	362,543
Gross profit			18,192			17,066			19,113			22,560
Income from operations before income tax expense			1,110			623			1,247			1,799
Net income available to common shareholders		$	1,480		$	339		$	785		$	1,011
Basic earnings per share available to common shareholders		$	2.15		$	0.49		$	1.21		$	1.64
Diluted earnings per share available to common shareholders		$	2.13		$	0.49		$	1.18		$	1.60

The Company’s quarterly earnings per share are based on weighted average shares outstanding for the quarter; therefore the sum of the quarters may not equal the full year earnings per share amount.

AMCON Distributing Company and Subsidiaries

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

The financial measure of adjusted book value per share included in this press release (“adjusted book value per share”) has been determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Management believes that this non-GAAP financial measurement reflects an additional way of viewing aspects of the Company’s business that, when viewed together with its financial results computed in accordance with GAAP, provides a more complete understanding of factors affecting historical financial performance of the Company. This measure is important to investors interested in determining the amount of book value per share if all potentially dilutive shares were exercised or vested and outstanding. This non-GAAP financial measurement is not intended to be a substitute for the comparable GAAP measurements and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

The Company has defined the non-GAAP financial measure of adjusted book value per share as follows:

• “Adjusted book value per share” is defined as total shareholders’ equity increased by the impact of proceeds from the exercise of all stock options and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options and vesting of restricted stock units.”

		September 2019
Number of common shares outstanding at September 30, 2019			552,614
Total shareholders’ equity at September 30, 2019		$	60,756,742
Book value per share at September 30, 2019		$	109.94
		September 2019
Number of common shares outstanding at September 30, 2019			552,614
Add: common shares potentially issuable for stock options and unvested restricted stock units /1/			64,601
			617,215
Total shareholders’ equity at September 30, 2019		$	60,756,742
Equity impact if all potential common shares were exercised or vested /1/			5,013,915
		$	65,770,657
Adjusted book value per share at September 30, 2019		$	106.56

/1/

Assumes the exercise of all vested and unvested stock options and vesting of all outstanding restricted stock units at September 30, 2019.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191108005613/en/