AMCON Distributing Company Reports Results for the Quarter Ended June 30, 2024

Rhea-AI Summary

AMCON Distributing Company (NYSE American: DIT) reported fully diluted earnings per share of $2.46 on net income of $1.5 million for Q3 fiscal 2024. Sales reached $717.9 million, with total shareholders' equity at approximately $110.0 million. The company highlighted its customer-centric approach and recent acquisition of Richmond Master Distributors, Inc.

AMCON is facing challenges including labor shortages, supply chain issues, inflation, and rising interest rates. Despite this, the company is investing in strategic areas such as foodservice, technology platforms, and new distribution facilities. AMCON operates 13 distribution centers across 10 states and 15 health and natural product retail stores through its Healthy Edge Retail Group.

Positive

• Reported earnings per share of $2.46 and net income of $1.5 million for Q3 2024
• Achieved sales of $717.9 million for the quarter
• Total shareholders' equity of approximately $110.0 million
• Completed acquisition of Richmond Master Distributors, Inc.
• Expanded geographic reach through recent acquisitions
• Maintained strong liquidity position
• Investing in new distribution facilities and enhanced foodservice capabilities

Negative

• Facing challenges from labor shortages, supply chain issues, and inflation
• Impacted by volatility in energy prices
• Affected by rising interest rates

Insights

Financial Analyst

AMCON Distributing Company's recent quarterly earnings report shows a fully diluted earnings per share of $2.46 and a net income of $1.5 million. Additionally, sales for the quarter reached $717.9 million, indicating strong revenue generation despite ongoing economic challenges like inflation and labor shortages. The company's total shareholders' equity stands at approximately $110.0 million, showcasing a stable financial foundation.

From a financial perspective, the company's recent acquisition of Richmond Master Distributors, Inc. expands its geographic reach and has the potential to enhance its revenue streams. However, investors should be cautious about the ongoing economic headwinds discussed by the management, which include supply chain issues and rising interest rates. The amendment to the bank credit facilities providing additional flexibility is a positive signal for future strategic investments.

In the short-term, these financial metrics suggest stability and potential growth. In the long-term, continuous investments in infrastructure and strategic acquisitions will likely bolster AMCON's market position. That said, the impact of external economic factors should be closely monitored.

Market Research Analyst

The report highlights AMCON's strategic investments in distribution facilities and enhanced foodservice capabilities. Notably, the completion of a 175,000 square foot distribution facility in Springfield, Missouri and a 250,000 square foot facility in Colorado City, Colorado, demonstrates a commitment to expanding operational capacities. This move is strategic given the company's focus on foodservice, which is a growing segment within the convenience distribution sector.

Expanding into new geographic areas and increasing capacity can be a double-edged sword; while it positions the company to cater to a broader customer base and potentially increase market share, it also involves significant capital expenditure. The company's mention of labor shortages and supply chain issues suggests that these expansions could face operational challenges in the near term.

Investors should weigh the potential long-term growth against the immediate risks associated with these expansions. If successfully executed, these investments could significantly enhance AMCON's competitive advantage and profitability.

OMAHA, Neb.--(BUSINESS WIRE)-- AMCON Distributing Company (“AMCON” or “the Company”) (NYSE American: DIT), an Omaha, Nebraska based Convenience and Foodservice Distributor, is pleased to announce fully diluted earnings per share of $2.46 on net income available to common shareholders of $1.5 million for its third fiscal quarter ended June 30, 2024.

“AMCON’s customer-centric philosophy is a competitive advantage in this economic environment, as our customers rely on our ability to deliver a timely flow of goods and services. Foodservice, technology platforms, and associated staffing for these strategic areas are a central focus of our management team. We are committed to making the investments necessary to compete in the marketplace,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We welcome our new team members and customers from our recently completed acquisition of Richmond Master Distributors, Inc. AMCON is committed to pursuing strategic acquisition opportunities in the Convenience Distributor and Foodservice sectors.”

“Labor shortages, supply chain issues, inflation, volatility in energy prices, and the impact of rising interest rates continue to present challenges for our business,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer added, “Our recent acquisitions have enhanced our geographic reach to better serve our customers as they grow their store footprints.”

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, “Sales for the fiscal quarter ended June 30, 2024 were $717.9 million and the Company ended the fiscal period with total shareholders’ equity of approximately $110.0 million. We continue to maintain a strong liquidity position and recent amendments to our bank credit facilities provided additional flexibility to pursue our strategic objectives that materialized during the quarter.” Mr. Schmaderer also added, “We continue to invest in the final completion of our 175,000 square foot distribution facility in Springfield, Missouri. In addition, we are also deploying capital in enhanced foodservice capabilities in our recently purchased 250,000 square foot distribution facility in Colorado City, Colorado, and we opened a new retail location in Lakewood Ranch, Florida.”

AMCON, and its subsidiaries Team Sledd, LLC and Henry’s Foods, Inc., is a leading Convenience and Foodservice Distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and refrigerated foods, automotive supplies and health and beauty care products with thirteen (13) distribution centers in Colorado, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee, and West Virginia. Through its Healthy Edge Retail Group, AMCON operates fifteen (15) health and natural product retail stores in the Midwest and Florida.

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, 2024 and September 30, 2023
		June				September
		2024				2023
		(Unaudited)
ASSETS
Current assets:
Cash		$	719,342			$	790,931
Accounts receivable, less allowance for credit losses of $2.5 million at June 2024 and $2.4 million at September 2023			80,469,376				70,878,420
Inventories, net			160,778,835				158,582,816
Income taxes receivable			330,170				1,854,484
Prepaid expenses and other current assets			15,991,451				13,564,056
Total current assets			258,289,174				245,670,707
Property and equipment, net			103,989,865				80,607,451
Operating lease right-of-use assets, net			24,710,670				23,173,287
Goodwill			5,778,325				5,778,325
Other intangible assets, net			4,881,659				5,284,935
Other assets			2,954,262				2,914,495
Total assets		$	400,603,955			$	363,429,200
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	46,249,366			$	43,099,326
Accrued expenses			16,590,155				14,922,279
Accrued wages, salaries and bonuses			8,168,882				8,886,529
Current operating lease liabilities			6,662,109				6,063,048
Current maturities of long-term debt			5,335,127				1,955,065
Current mandatorily redeemable non-controlling interest			1,651,608				1,703,604
Total current liabilities			84,657,247				76,629,851
Credit facilities			156,941,944				140,437,989
Deferred income tax liability, net			4,594,841				4,917,960
Long-term operating lease liabilities			18,358,088				17,408,758
Long-term debt, less current maturities			17,917,378				11,675,439
Mandatorily redeemable non-controlling interest, less current portion			6,497,523				7,787,227
Other long-term liabilities			1,669,817				402,882
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 630,362 shares outstanding at June 2024 and 608,689 shares outstanding at September 2023			9,648				9,431
Additional paid-in capital			33,800,187				30,585,388
Retained earnings			107,429,445				104,846,438
Treasury stock at cost			(31,272,163	)			(31,272,163	)
Total shareholders’ equity			109,967,117				104,169,094
Total liabilities and shareholders’ equity		$	400,603,955			$	363,429,200

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and nine months ended June 30, 2024 and 2023
		For the three months ended June								For the nine months ended June
		2024				2023				2024				2023
Sales (including excise taxes of $150.2 and $153.7 million, and $415.7 and $414.9 million, respectively)		$	717,852,293			$	696,489,427			$	1,964,688,673			$	1,847,472,782
Cost of sales			669,893,539				649,623,651				1,831,118,129				1,724,504,862
Gross profit			47,958,754				46,865,776				133,570,544				122,967,920
Selling, general and administrative expenses			39,920,976				36,851,520				113,857,467				99,227,695
Depreciation and amortization			2,415,158				2,103,429				6,923,716				4,982,068
			42,336,134				38,954,949				120,781,183				104,209,763
Operating income			5,622,620				7,910,827				12,789,361				18,758,157
Other expense (income):
Interest expense			2,903,925				2,385,842				7,463,175				6,249,540
Change in fair value of mandatorily redeemable non-controlling interest			393,324				698,571				727,457				864,684
Other (income), net			(78,903	)			(931,765	)			(833,050	)			(1,159,021	)
			3,218,346				2,152,648				7,357,582				5,955,203
Income from operations before income taxes			2,404,274				5,758,179				5,431,779				12,802,954
Income tax expense			914,875				1,813,800				2,331,875				4,164,000
Net income available to common shareholders		$	1,489,399			$	3,944,379			$	3,099,904			$	8,638,954
Basic earnings per share available to common shareholders		$	2.48			$	6.74			$	5.18			$	14.78
Diluted earnings per share available to common shareholders		$	2.46			$	6.59			$	5.11			$	14.56
Basic weighted average shares outstanding			600,161				585,625				598,637				584,359
Diluted weighted average shares outstanding			606,252				598,590				606,151				593,480
Dividends paid per common share		$	0.18			$	0.18			$	0.82			$	5.54

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Shareholders’ Equity
for the three and nine months ended June 30, 2024 and 2023
														Additional
		Common Stock					Treasury Stock							Paid-in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
THREE MONTHS ENDED JUNE 2023
Balance, April 1, 2023		943,272		$	9,431		(332,220	)		$	(30,867,287	)		$	29,766,566		$	98,167,058			$	97,075,768
Dividends on common stock, $0.18 per share		—			—		—				—				—			(111,219	)			(111,219	)
Compensation expense related to equity-based awards		—			—		—				—				409,411			—				409,411
Committed repurchase of common stock		—			—		(2,363	)			(404,876	)			—			—				(404,876	)
Net income available to common shareholders		—			—		—				—				—			3,944,379				3,944,379
Balance, June 30, 2023		943,272		$	9,431		(334,583	)		$	(31,272,163	)		$	30,175,977		$	102,000,218			$	100,913,463
THREE MONTHS ENDED JUNE 2024
Balance, April 1, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	33,160,639		$	106,053,510			$	107,951,634
Dividends on common stock, $0.18 per share		—			—		—				—				—			(113,464	)			(113,464	)
Compensation expense related to equity-based awards		—			—		—				—				639,548			—				639,548
Net income available to common shareholders		—			—		—				—				—			1,489,399				1,489,399
Balance, June 30, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	33,800,187		$	107,429,445			$	109,967,117

														Additional
		Common Stock					Treasury Stock							Paid-in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
NINE MONTHS ENDED JUNE 2023
Balance, October 1, 2022		917,009		$	9,168		(332,220	)		$	(30,867,287	)		$	26,903,201		$	96,784,353			$	92,829,435
Dividends on common stock, $5.54 per share		—			—		—				—				—			(3,423,089	)			(3,423,089	)
Compensation expense and issuance of stock in connection with equity-based awards		26,263			263		—				—				3,272,776			—				3,273,039
Committed repurchase of common stock		—			—		(2,363	)			(404,876	)			—			—				(404,876	)
Net income available to common shareholders		—			—		—				—				—			8,638,954				8,638,954
Balance, June 30, 2023		943,272		$	9,431		(334,583	)		$	(31,272,163	)		$	30,175,977		$	102,000,218			$	100,913,463
NINE MONTHS ENDED JUNE 2024
Balance, October 1, 2023		943,272		$	9,431		(334,583	)		$	(31,272,163	)		$	30,585,388		$	104,846,438			$	104,169,094
Dividends on common stock, $0.82 per share		—			—		—				—				—			(516,897	)			(516,897	)
Compensation expense and issuance of stock in connection with equity-based awards		21,673			217		—				—				3,214,799			—				3,215,016
Net income available to common shareholders		—			—		—				—				—			3,099,904				3,099,904
Balance, June 30, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	33,800,187		$	107,429,445			$	109,967,117

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the nine months ended June 30, 2024 and 2023
		June				June
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders		$	3,099,904			$	8,638,954
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation			6,520,440				4,701,316
Amortization			403,276				280,752
(Gain) loss on sales of property and equipment			(141,522	)			(133,159	)
Equity-based compensation			1,850,233				1,940,631
Deferred income taxes			(323,119	)			809,616
Provision for credit losses			131.132				(7,697	)
Inventory allowance			175,706				442,603
Change in fair value of contingent consideration			45,362				—
Change in fair value of mandatorily redeemable non-controlling interest			727,457				864,684
Changes in assets and liabilities, net of effects of business combinations:
Accounts receivable			(4,110,926	)			(8,026,950	)
Inventories			12,365,936				(12,294,118	)
Prepaid and other current assets			(999,319	)			(745,490	)
Other assets			(39,767	)			(569,683	)
Accounts payable			4,082,394				10,360,228
Accrued expenses and accrued wages, salaries and bonuses			1,112,351				1,487,971
Other long-term liabilities			446,831				185,704
Income taxes payable and receivable			1,524,314				1,572,253
Net cash flows from (used in) operating activities			26,870,683				9,507,615
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(16,793,486	)			(6,759,929	)
Proceeds from sales of property and equipment			306,748				151,307
Acquisition of Burklund			(15,464,397	)			—
Acquisition of Richmond Master			(6,631,039	)			—
Acquisition of Henry's			—				(54,865,303	)
Net cash flows from (used in) investing activities			(38,582,174	)			(61,473,925	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities			1,845,255,576				1,863,027,754
Repayments under revolving credit facilities			(1,828,751,621	)			(1,810,914,231	)
Proceeds from borrowings on long-term debt			—				7,000,000
Principal payments on long-term debt			(2,277,999	)			(1,011,559	)
Dividends on common stock			(516,897	)			(3,423,089	)
Redemption and distributions to non-controlling interest			(2,069,157	)			(2,405,128	)
Net cash flows from (used in) financing activities			11,639,902				52,273,747
Net change in cash			(71,589	)			307,437
Cash, beginning of period			790,931				431,576
Cash, end of period		$	719,342			$	739,013
Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of amounts capitalized		$	6,976,501			$	5,824,144
Cash paid during the period for income taxes, net of refunds			1,066,105				1,780,000
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	83,180			$	1,622,224
Committed repurchase of treasury stock			—				404,876
Purchase of property financed with promissory note			8,000,000				—
Portion of Burklund acquisition financed with promissory note			3,900,000				—
Portion of Burklund acquisition financed with contingent consideration			1,578,444				—
Issuance of common stock in connection with the vesting of equity-based awards			1,296,372				2,044,805

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240718546002/en/

Charles J. Schmaderer

AMCON Distributing Company

Ph 402-331-3727

Source: AMCON Distributing Company

FAQ

What were AMCON's (DIT) earnings per share for Q3 2024?

AMCON Distributing Company (DIT) reported fully diluted earnings per share of $2.46 for the third fiscal quarter ended June 30, 2024.

How much were AMCON's (DIT) sales for Q3 2024?

AMCON Distributing Company (DIT) reported sales of $717.9 million for the fiscal quarter ended June 30, 2024.

What recent acquisition did AMCON (DIT) complete?

AMCON Distributing Company (DIT) recently completed the acquisition of Richmond Master Distributors, Inc.

What challenges is AMCON (DIT) currently facing?

AMCON (DIT) is facing challenges including labor shortages, supply chain issues, inflation, volatility in energy prices, and the impact of rising interest rates.

How many distribution centers does AMCON (DIT) operate?

AMCON Distributing Company (DIT) operates thirteen distribution centers across Colorado, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee, and West Virginia.