AMCON Distributing Company Reports Results for the Quarter Ended June 30, 2021

Rhea-AI Summary

AMCON Distributing Company (NYSE American: DIT) reported fully diluted earnings per share of $6.48 and net income of $3.7 million for the third fiscal quarter ending June 30, 2021. The wholesale distribution segment generated revenues of $426.6 million with an operating income of $6.3 million, while the retail health food segment reported revenues of $11.7 million and operating income of $0.6 million. Challenges include supply chain disruptions and a competitive wage environment. AMCON maintains $71.4 million in shareholders' equity, focusing on liquidity and strategic acquisitions.

Positive

• Earnings per share increased to $6.48.
• Net income available to common shareholders reached $3.7 million.
• Wholesale distribution segment revenues were $426.6 million.
• Retail health food segment revenues were $11.7 million.
• Maintained $71.4 million in shareholders' equity.

Negative

• Supply chain disruptions impacted product availability.
• Acute workforce shortage led to a hyper-competitive wage environment.

AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $6.48 on net income available to common shareholders of $3.7 million for its third fiscal quarter ended June 30, 2021.

“We are pleased with our results for the third fiscal quarter. Our Management Team and Associates’ central focus is on delivering a consistent level of high quality service to our customers in this challenging economic environment,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON continues to seek out acquisition opportunities for Convenience and Food Service Distributors who want to align with our growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $426.6 million and operating income of $6.3 million for the third quarter of fiscal 2021. The retail health food segment reported revenues of $11.7 million and operating income of $0.6 million for the third quarter of fiscal 2021.

“Ongoing supply chain disruptions at consumer packaged goods companies have impacted product availability across all markets including the convenience distribution industry in which our Company operates. Additionally, the United States is experiencing an acute workforce shortage which has created a hyper-competitive wage environment which has impacted the Company’s operations. Our customer base continues to grow geographically and AMCON is deploying the capital and human resources necessary to support our customers’ 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, “AMCON is pleased with the progress of our strategic investment in Team Sledd, LLC. In addition, AMCON ended the quarter with $71.4 million of shareholders’ equity and we continue to diligently focus on maintaining high levels of liquidity in our business to support operations and our growth initiatives.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. Throughout the pandemic, our management team has worked diligently to offer a continuous and safe shopping experience for customers. 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 chilled foods, and health and beauty care products with locations in Illinois, Missouri, Nebraska, North Dakota, South Dakota and Tennessee. AMCON also 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 June 30, 2021 and September 30, 2020
		June				September
		2021				2020
		(Unaudited)
ASSETS
Current assets:
Cash		$	699,895			$	661,195
Accounts receivable, less allowance for doubtful accounts of $0.9 million at June 2021 and September 2020			36,526,770				34,278,429
Inventories, net			95,640,441				98,971,773
Prepaid and other current assets			5,769,066				2,091,645
Total current assets			138,636,172				136,003,042
Property and equipment, net			16,425,171				17,497,274
Operating lease right-of-use assets, net			17,148,745				18,936,126
Note receivable			3,500,000				3,500,000
Goodwill			4,436,950				4,436,950
Other intangible assets, net			500,000				500,000
Equity method investment			7,784,753				6,744,095
Other assets			349,139				383,786
Total assets		$	188,780,930			$	188,001,273
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	24,788,839			$	22,108,299
Accrued expenses			11,169,530				8,306,160
Accrued wages, salaries and bonuses			3,839,072				4,761,020
Income taxes payable			495,860				567,408
Current operating lease liabilities			5,503,940				5,607,098
Current maturities of long-term debt			555,832				516,850
Total current liabilities			46,353,073				41,866,835
Credit facility			51,491,984				61,971,682
Deferred income tax liability, net			1,585,882				1,806,575
Long-term operating lease liabilities			12,000,823				14,028,606
Long-term debt, less current maturities			5,196,596				2,608,794
Other long-term liabilities			757,387				927,241
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 551,369 shares outstanding at June 2021 and 537,715 shares outstanding at September 2020			8,834				8,697
Additional paid-in capital			24,943,292				24,282,058
Retained earnings			77,310,346				71,362,334
Treasury stock at cost			(30,867,287	)			(30,861,549	)
Total shareholders’ equity			71,395,185				64,791,540
Total liabilities and shareholders’ equity		$	188,780,930			$	188,001,273

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and nine months ended June 30, 2021 and 2020
		For the three months ended June								For the nine months ended June
		2021				2020				2021				2020
Sales (including excise taxes of $104.9 million and $103.6 million, and $297.4 million and $285.1 million, respectively)		$	438,313,030			$	396,854,324			$	1,221,571,294			$	1,094,841,943
Cost of sales			412,771,324				375,202,044				1,149,594,823				1,031,651,499
Gross profit			25,541,706				21,652,280				71,976,471				63,190,444
Selling, general and administrative expenses			20,501,117				18,377,641				58,123,100				55,843,266
Depreciation			741,180				801,683				2,295,390				2,318,045
			21,242,297				19,179,324				60,418,490				58,161,311
Operating income			4,299,409				2,472,956				11,557,981				5,029,133
Other expense (income):
Interest expense			329,929				461,581				1,016,902				1,321,267
Other (income), net			(43,437	)			(42,525	)			(169,525	)			(79,222	)
			286,492				419,056				847,377				1,242,045
Income from operations before income taxes			4,012,917				2,053,900				10,710,604				3,787,088
Income tax expense			1,076,000				586,000				2,916,000				1,168,000
Equity method investment earnings, net of tax			754,293				111,666				1,403,124				111,666
Net income available to common shareholders		$	3,691,210			$	1,579,566			$	9,197,728			$	2,730,754
Basic earnings per share available to common shareholders		$	6.69			$	2.79			$	16.71			$	4.84
Diluted earnings per share available to common shareholders		$	6.48			$	2.77			$	16.37			$	4.79
Basic weighted average shares outstanding			551,369				565,483				550,276				564,578
Diluted weighted average shares outstanding			569,481				569,902				561,940				569,873
Dividends declared and paid per common share		$	0.18			$	0.18			$	5.54			$	0.82

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Shareholders’ Equity for the three and nine months ended June 30, 2021 and 2020
														Additional
		Common Stock					Treasury Stock							Paid-in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
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
THREE MONTHS ENDED JUNE 2021
Balance, April 1, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,917,765		$	73,724,722			$	67,784,034
Dividends on common stock, $0.18 per share		—			—		—				—				—			(105,586	)			(105,586	)
Compensation expense and issuance of stock in connection with equity-based awards		—			—		—				—				25,527			—				25,527
Repurchase of common stock		—			—		—				—				—			—				—
Net income		—			—		—				—				—			3,691,210				3,691,210
Balance, June 30, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,943,292		$	77,310,346			$	71,395,185

														Additional
		Common Stock					Treasury Stock							Paid-in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
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			—				1,085,370
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
NINE MONTHS ENDED JUNE 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, $5.54 per share		—			—		—				—				—			(3,249,716	)			(3,249,716	)
Compensation expense and issuance of stock in connection with equity-based awards		13,722			137		—				—				661,234			—				661,371
Repurchase of common stock		—			—		(68	)			(5,738	)			—			—				(5,738	)
Net income		—			—		—				—				—			9,197,728				9,197,728
Balance, June 30, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,943,292		$	77,310,346			$	71,395,185

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the nine months ended June 30, 2021 and 2020
		June				June
		2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	9,197,728			$	2,730,754
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:
Depreciation			2,295,390				2,318,045
Equity method investment earnings, net of tax			(1,403,124	)			(111,666	)
(Gain) loss on sales of property and equipment			(8,057	)			17,042
Equity-based compensation			1,819,272				765,704
Deferred income taxes			(220,693	)			(2,862	)
Provision for losses on doubtful accounts			86,000				349,000
Inventory allowance			238,148				182,218
Changes in assets and liabilities:
Accounts receivable			(2,334,341	)			(9,309,422	)
Inventories			3,093,184				20,152,080
Prepaid and other current assets			(3,677,421	)			(373,414	)
Equity method investment distributions			828,466				—
Other assets			34,647				(126,364	)
Accounts payable			2,680,540				2,040,386
Accrued expenses and accrued wages, salaries and bonuses			804,983				(1,424,472	)
Other long-term liabilities			(169,854	)			125,744
Income taxes payable and receivable			(537,548	)			794,027
Net cash flows from (used in) operating activities			12,727,320				18,126,800
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(1,254,958	)			(2,901,134	)
Proceeds from sales of property and equipment			39,728				16,600
Investment in equity method investee			—				(6,500,000	)
Issuance of note receivable			—				(3,500,000	)
Net cash flows from (used in) investing activities			(1,215,230	)			(12,884,534	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility			1,217,375,073				1,083,878,207
Repayments under revolving credit facility			(1,227,854,771	)			(1,087,870,919	)
Proceeds from borrowings on long-term debt			3,000,000				—
Principal payments on long-term debt			(373,216	)			(397,936	)
Proceeds from exercise of stock options			—				25,750
Repurchase of common stock			(5,738	)			(100,524	)
Dividends on common stock			(3,249,716	)			(487,776	)
Settlement and withholdings of equity-based awards			(365,022	)			(30,208	)
Net cash flows from (used in) financing activities			(11,473,390	)			(4,983,406	)
Net change in cash			38,700				258,860
Cash, beginning of period			661,195				337,704
Cash, end of period		$	699,895			$	596,564
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	1,031,457			$	1,387,381
Cash paid during the period for income taxes			3,667,036				376,835
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	—			$	100,424
Issuance of common stock in connection with the vesting and exercise of equity-based awards			949,812				990,653

 

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FAQ

What were AMCON's earnings per share for the third fiscal quarter of 2021?

AMCON reported earnings per share of $6.48 for the third fiscal quarter ending June 30, 2021.

How much net income did AMCON report in Q3 2021?

AMCON reported a net income of $3.7 million available to common shareholders for the third fiscal quarter of 2021.

What are the revenue figures for AMCON's wholesale distribution segment?

The wholesale distribution segment generated revenues of $426.6 million for the third fiscal quarter of 2021.

What challenges is AMCON facing in the current economic environment?

AMCON is facing supply chain disruptions and a competitive wage environment due to an acute workforce shortage.

What is the value of AMCON's shareholders' equity?

AMCON ended the quarter with shareholders' equity of $71.4 million.