AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2022

AMCON Distributing Company (“AMCON” or “Company”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $5.19 on net income available to common shareholders of $3.0 million for its second fiscal quarter ended March 31, 2022.

“We are pleased with our results for the second fiscal quarter. Our management team has remained highly focused on delivering a consistently superior level of customer service in a highly challenging operating environment,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON continues to seek out acquisition opportunities for distributors who want to align with our growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $379.5 million and operating income of $6.3 million for the second quarter of fiscal 2022. The retail health food segment reported revenues of $12.4 million and operating income of $0.7 million for the second quarter of fiscal 2022.

“Ongoing supply chain disruptions with the consumer-packaged goods companies we partner with have impacted product availability across all markets, including the convenience distribution industry in which our company operates. The United States continues to experience an acute workforce shortage which we work diligently to address in our daily operations. Our Annual Spring Trade Show was well received and provides momentum as we enter our summer season. AMCON’s customer base continues to grow geographically and we are deploying the capital and human resources necessary to support this growth in a collaborative fashion,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “We are actively searching for facilities in, and adjacent to, the geographic markets we serve.”

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, “We are pleased with the ongoing progress of our strategic investment in Team Sledd, LLC. As a core operating principle we continue to maintain consistently high levels of liquidity to support the Company’s various strategic initiatives and long-term growth plan. We ended the quarter with $82.0 million of shareholders’ equity.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. Our long-term relationship with the organic/natural products vendor community has enabled our stores to meet the demands of our customers for total wellness solutions. Our strategy is to offer a broad selection of the highest quality organic and natural merchandise available supported by a high degree of customer service not found at other big box retailers within our industry.

AMCON is a leading wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and refrigerated foods, automotive supplies and health and beauty care products with distribution locations in Illinois, Missouri, Nebraska, North Dakota, South Dakota and Tennessee. AMCON, through its Healthy Edge Retail Group, operates twenty (20) 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, 2022 and September 30, 2021
		March				September
		2022				2021
		(Unaudited)
ASSETS
Current assets:
Cash		$	527,555			$	519,591
Accounts receivable, less allowance for doubtful accounts of $0.9 million at March 2022 and September 2021			33,556,601				35,844,163
Inventories, net			90,248,795				95,212,085
Income taxes receivable			670,234				—
Prepaid expenses and other current assets			5,476,104				4,999,125
Total current assets			130,479,289				136,574,964
Property and equipment, net			15,282,499				16,012,524
Operating lease right-of-use assets, net			16,280,827				17,846,529
Note receivable, net of current portion			3,325,000				3,325,000
Goodwill			4,436,950				4,436,950
Other intangible assets, net			500,000				500,000
Equity method investment			10,451,386				9,380,343
Other assets			414,120				334,819
Total assets		$	181,170,071			$	188,411,129
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	25,601,210			$	24,235,042
Accrued expenses			9,747,031				11,468,955
Accrued wages, salaries and bonuses			4,011,309				4,489,852
Income taxes payable			—				867,160
Current operating lease liabilities			5,458,358				5,513,390
Current maturities of long-term debt			572,100				561,202
Total current liabilities			45,390,008				47,135,601
Credit facility			35,191,547				43,650,865
Deferred income tax liability, net			2,630,427				1,531,228
Long-term operating lease liabilities			11,123,103				12,669,157
Long-term debt, less current maturities			4,765,465				5,054,265
Other long-term liabilities			36,069				757,387
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 584,789 shares outstanding at March 2022 and 551,369 shares outstanding at September 2021			9,168				8,834
Additional paid-in capital			26,555,046				24,918,781
Retained earnings			86,336,525				83,552,298
Treasury stock at cost			(30,867,287	)			(30,867,287	)
Total shareholders’ equity			82,033,452				77,612,626
Total liabilities and shareholders’ equity		$	181,170,071			$	188,411,129

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and six months ended March 31, 2022 and 2021
		For the three months ended March								For the six months ended March
		2022				2021				2022				2021
Sales (including excise taxes of $89.1 million and $92.0 million, and $186.2 million and $192.5 million, respectively)		$	391,888,192			$	378,513,490			$	814,459,469			$	783,258,263
Cost of sales			365,211,270				355,540,704				760,849,885				736,823,498
Gross profit			26,676,922				22,972,786				53,609,584				46,434,765
Selling, general and administrative expenses			21,915,351				19,022,167				44,306,090				37,621,983
Depreciation			818,222				779,925				1,602,467				1,554,210
			22,733,573				19,802,092				45,908,557				39,176,193
Operating income			3,943,349				3,170,694				7,701,027				7,258,572
Other expense (income):
Interest expense			244,920				310,543				567,018				686,973
Other (income), net			(60,958	)			(84,265	)			(101,068	)			(126,088	)
			183,962				226,278				465,950				560,885
Income from operations before income taxes			3,759,387				2,944,416				7,235,077				6,697,687
Income tax expense			1,345,000				829,000				2,590,000				1,840,000
Equity method investment earnings, net of tax			591,795				313,492				1,362,161				648,831
Net income available to common shareholders		$	3,006,182			$	2,428,908			$	6,007,238			$	5,506,518
Basic earnings per share available to common shareholders		$	5.29			$	4.41			$	10.62			$	10.02
Diluted earnings per share available to common shareholders		$	5.19			$	4.33			$	10.33			$	9.87
Basic weighted average shares outstanding			567,889				551,369				565,694				549,729
Diluted weighted average shares outstanding			578,751				560,941				581,328				557,741
Dividends paid per common share		$	0.18			$	5.18			$	5.36			$	5.36

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Shareholders’ Equity for the three and six months ended March 31, 2022 and 2021
														Additional
		Common Stock					Treasury Stock							Paid-in				Retained
		Shares		Amount			Shares			Amount				Capital				Earnings				Total
THREE MONTHS ENDED MARCH 2021
Balance, January 1, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	25,007,239			$	71,401,400			$	65,550,186
Dividends on common stock, $0.18 per share		—			—		—				—				—				(105,586	)			(105,586	)
Compensation expense and settlement of equity-based awards		—			—		—				—				(89,474	)			—				(89,474	)
Repurchase of common stock		—			—		—				—				—				—				—
Net income		—			—		—				—				—				2,428,908				2,428,908
Balance, March 31, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,917,765			$	73,724,722			$	67,784,034
THREE MONTHS ENDED MARCH 2022
Balance, January 1, 2022		915,009		$	9,148		(332,220	)		$	(30,867,287	)		$	26,999,735			$	83,438,578			$	79,580,174
Dividends on common stock, $0.18 per share		—			—		—				—				—				(108,235	)			(108,235	)
Compensation expense and settlement of equity-based awards		2,000			20		—				—				(444,689	)			—				(444,669	)
Repurchase of common stock		—			—		—				—				—				—				—
Net income		—			—		—				—				—				3,006,182				3,006,182
Balance, March 31, 2022		917,009		$	9,168		(332,220	)		$	(30,867,287	)		$	26,555,046			$	86,336,525			$	82,033,452
														Additional
		Common Stock					Treasury Stock							Paid-in				Retained
		Shares		Amount			Shares			Amount				Capital				Earnings				Total
SIX MONTHS ENDED MARCH 2021
Balance, October 1, 2020		869,867		$	8,697		(332,152	)		$	(30,861,549	)		$	24,282,058			$	71,362,334			$	64,791,540
Dividends on common stock, $5.36 per share		—			—		—				—				—				(3,144,130	)			(3,144,130	)
Compensation expense and settlement of equity-based awards		13,722			137		—				—				635,707				—				635,844
Repurchase of common stock		—			—		(68	)			(5,738	)			—				—				(5,738	)
Net income		—			—		—				—				—				5,506,518				5,506,518
Balance, March 31, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,917,765			$	73,724,722			$	67,784,034
SIX MONTHS ENDED MARCH 2022
Balance, October 1, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,918,781			$	83,552,298			$	77,612,626
Dividends on common stock, $5.36 per share		—			—		—				—				—				(3,223,011	)			(3,223,011	)
Compensation expense and settlement of equity-based awards		33,420			334		—				—				1,636,265				—				1,636,599
Repurchase of common stock		—			—		—				—				—				—				—
Net income		—			—		—				—				—				6,007,238				6,007,238
Balance, March 31, 2022		917,009		$	9,168		(332,220	)		$	(30,867,287	)		$	26,555,046			$	86,336,525			$	82,033,452

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the six months ended March 31, 2022 and 2021
		March				March
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	6,007,238			$	5,506,518
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:
Depreciation			1,602,467				1,554,210
Equity method investment earnings, net of tax			(1,362,161	)			(648,831	)
(Gain) loss on sales of property and equipment			(76,220	)			(1,374	)
Equity-based compensation			1,208,655				833,624
Deferred income taxes			1,099,199				48,248
Provision for losses on doubtful accounts			(3,000	)			5,000
Inventory allowance			155,534				110,769
Changes in assets and liabilities:
Accounts receivable			2,290,562				1,390,027
Inventories			4,807,756				17,772,604
Prepaid and other current assets			(651,979	)			(4,096,452	)
Equity method investment distributions			744,118				—
Other assets			(79,301	)			23,327
Accounts payable			1,465,370				429,389
Accrued expenses and accrued wages, salaries and bonuses			(700,748	)			(610,589	)
Other long-term liabilities			(721,318	)			(169,854	)
Income taxes payable and receivable			(1,990,394	)			(867,112	)
Net cash flows from (used in) operating activities			13,795,778				21,279,504
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(974,424	)			(720,567	)
Proceeds from sales of property and equipment			79,000				10,938
Principal payment received on note receivable			175,000				—
Net cash flows from (used in) investing activities			(720,424	)			(709,629	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility			819,125,190				771,182,879
Repayments under revolving credit facility			(827,584,508	)			(791,045,384	)
Proceeds from borrowings on long-term debt			—				3,000,000
Principal payments on long-term debt			(277,902	)			(237,566	)
Proceeds from exercise of stock options			173,590				—
Repurchase of common stock			—				(5,738	)
Dividends on common stock			(3,223,011	)			(3,144,130	)
Settlement and withholdings of equity-based awards			(1,280,749	)			(365,022	)
Net cash flows from (used in) financing activities			(13,067,390	)			(20,614,961	)
Net change in cash			7,964				(45,086	)
Cash, beginning of period			519,591				661,195
Cash, end of period		$	527,555			$	616,109
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	582,394			$	690,134
Cash paid during the period for income taxes			3,481,196				2,658,865
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	29,047			$	16,230
Issuance of common stock in connection with the vesting and exercise of equity-based awards			2,280,783				949,812

 

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